Custom, Excise & Service Tax Tribunal
Racold Thermo Ltd vs Commissioner Of Central Excise on 10 April, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI COURT No. II Appln.No.ST/S/133/11 APPEAL No.ST/32/11 (Arising out of Order-in-Appeal No.PI/RKS/206/2010 dated 27/10/2010 passed by Commissioner of Central Excise (Appeals), Pune-I) For approval and signature: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.R. Chandrasekharan, Member (Technical) 1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether Their Lordships wish to see the fair copy :Seen of the Order? 4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================
Racold Thermo Ltd., Appellant
Vs.
Commissioner of Central Excise, Respondent
Pune
Appearance:
Shri.Makrand Joshi, Advocate for appellant
Shri.D.M.Durando, AR, for respondent
CORAM:
Honble Mr. Ashok Jindal, Member (Judicial)
Honble Mr. P.R.Chandrasekharan, Member (Technical)
Date of Hearing : 10/04/2012
Date of Decision : /04/2012
ORDER NO
Per: P.R. Chandrasekharan
1. This appeal and stay application are directed against order-in-appeal No.PI/RKS/206/2010 dated 27/10/2010 passed by the Commissioner of Central Excise (Appeals), Pune-I.
2. The appellant M/s.Racold Thermo Ltd. are engaged in the manufacture of excisable goods and are also the providers of taxable services of Renting of Immovable Property, Goods Transport Services, etc. The appellants got a factory constructed and paid service tax on commercial construction services. They availed Cenvat credit in respect of service tax paid on the construction services in providing services of renting of immovable property as they had rented out the factory premises. Vide letter dated 08/02/2010 they informed the Assistant Commissioner, Service Tax, Pune-I Commissionerate of the fact of availment of Cenvat credit and providing services of renting of immovable property and sought clarification about the correctness of availment of Cenvat credit of the service tax paid in respect of construction service. The appellants received two letters from the Assistant Commissioner of Service Tax vide letters dated 09/04/2010 and 19/04/2010. In the letter dated 09/04/2010, it was clarified that the Cenvat credit availed on construction services and utilised for paying service tax on renting of immovable property service is not proper and the appellant was requested to reverse the Cenvat credit availed along with interest and produce proof of payment immediately. In the letter dated 19/04/2010 the Assistant Commissioner also referred to the clarifications given by the Board in the matter vide Circular No.98/01/2008-St dated 04/01/2008 and once again clarified that the appellant is not eligible to avail service tax credit on renting of immovable property service and they were also directed to reverse Cenvat credit availed, if any, along with interest immediately. Against the said letters, the appellant preferred an appeal before the Commissioner (Appeals) and the Ld. Appellate authority vide the impugned order dismissed the appeal on the ground that the letters issued by the Assistant Commissioner is not an adjudication order against which an appeal lies, inasmuch as no show-cause notice or order-in-original confirming the Cenvat credit has been issued and, therefore, the said communication by the Assistant Commissioner is not an order-in-original against which an appeal lies. Accordingly, he dismissed the appeal as pre-mature and not maintainable. Hence the appellant is before us.
3. The Ld. Advocate for the appellant submits that the communication received from the Assistant Commissioner rejecting their claim for Cenvat credit and directing them to reverse the Cenvat credit along with interest is a decision or order for the purpose of Section 35 of the Central Excise Act, 1944 and, therefore, an appeal against said communication lies before the Commissioner (Appeals). He relies on the judgement of this Tribunal in the case of Shree Synthetics Ltd., Vs. CCE,Indore, reported in 1987 (29) ELT 443 (Tri) wherein it was held that if a communication in substance contains determination of a question by the application of objective standards as per the legal rules and it declares right or imposes an obligation affecting their civil rights and it is based on an investigation involving ascertainment of facts by means of evidence and if a dispute be on question of law on the presentation of legal argument, and a decision resulting in the disposal of the matter on findings based upon those questions of law and fact then as per the decision of the Honble apex Court in the case of Jaswant Sugar Mills Vs. Laxmi Chand (AIR 1963 Supreme Court 677), the communication would become an appealable order.
3.1 The Larger Bench of this Tribunal in the case of IOL Ltd., Vs. CC, reported in 1992 (59) ELT 477 (Tri) held that if a communication referred to the nature of the claim and declined to grant the relief giving the reason for the said finding, it can be treated as a decision and an appealable order.
3.2 The Ld. Advocate also relies on the decision of this Tribunal in the following cases in support of his contention:
a) Vijay Silicate & Chemical Works Vs. CCE, Meerut reported in 1987 (31) ELT 935 (Tri)
b) Apex Auto Ltd., Vs. CCE, Jamshedpur, reported in 2005 (191) ELT 173 (Tri-Kolkata)
c) Bhagwati Gases Ltd., Vs. CCE, Jaipur, reported in 2008 (226) ELT 468 (Tri-Del)
d) Vijai Marine Services Vs. CCE, Goa, reported in 2010 (252) ELT 378 (Tri-Mumbai).
4. The Ld. Dy. Commissioner (AR), appearing for the Revenue reiterates the findings of the lower appellate authority and argues that the letters of Assistant Commissioner are only mere communications and they are not orders of adjudication.
5. We have carefully considered the rival submissions. As the issue lies in a narrow compass, after granting stay, we take up the appeal itself for consideration and disposal.
5.1 In the two communications from the Assistant Commissioner of Service Tax Cell, Pune, it is made clear that the appellant is not eligible for Cenvat credit of Service tax paid on construction service for payment of service tax on their out put service, namely, renting of immovable property service. This clarification has been given based on Boards Circular dated 04/01/2008. Further the appellant has been directed to reverse the Cenvat credit availed along with interest thereon. Thus, there is a clear finding by the Assistant Commissioner on the question of eligibility to Cenvat credit of the service tax paid and also there is a direction to reverse the credit availed, if any, along with interest thereon. In view of this factual position, the communication satisfies the requirements of an appealable order as decided by the Honble apex Court in the Jaswant Sugar Mills case cited supra. In the said case, the honble apex Court held as follows:
To make a decision or an act judicial, the following criteria must be satisfied:
(1) It is in substance a determination upon investigation of a question by the application of objective standards to facts found in the light of pre-existing legal rules;
(2) It declares right or imposes upon parties obligations affecting their civil rights; and (3) That the investigation is subject to certain procedural attributes contemplating an opportunity of presenting its case to a party, ascertainment of facts by means of evidence if a dispute be on question of law on the presentation of legal argument, and a decision resulting in the disposal of the matter on findings based on those questions of law and fact. 5.2 Accordingly, we hold that the communication issued by the Assistant Commissioner, Service Tax Cell, Pune is an appealable order and is a quasi judicial one; therefore, appeal against the said decision lies before the Commissioner of Central Excise (Appeals), Pune and the appeal is maintainable before the said authority. Inasmuch as the said authority has dismissed the appeal as not maintainable and has not given a finding on merits, the matter has go back to the lower appellate authority for a decision on merits.
6. Accordingly, we set aside the impugned order and remand the matter back to the lower appellate authority for a decision on merits on the claim of the appellant in respect of their eligibility to Cenvat credit of service tax paid on construction services. Needless to say, the appellant should be given a reasonable opportunity for making their submissions before an order is passed. Thus, the appeal is allowed by way of remand.
(Order pronounced on ..) (Ashok Jindal) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) pj 1 6