Custom, Excise & Service Tax Tribunal
Tata Steel Ltd vs Cce Mumbai I on 15 June, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. E/2025, 2028, 2029/10 Mum
(Arising out of Order-in-Appeal No. SB(99)99/MV/2010 dated 03.09.2010; SB(94-95) 94-95/MV/2010 dated 31.08.2010 passed by the Commissioner of Central Excise (Appeals), Mumbai Zone I.)
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
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 : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
Tata Steel Ltd.
:
Appellant
Versus
CCE Mumbai I
Respondent
Appearance Shri Bharat Raichandani, Advocate For appellants Shri S. Dewalwar, Addl. Commissioner (A.R.) For Respondents CORAM:
Shri Ashok Jindal, Member (Judicial) Date of Hearing : 15.06.2012 Date of Decision : 15.06.2012 ORDER NO.
Per Ashok Jindal The appellants are in appeals against the impugned orders for denying the credit in respect of service tax paid on input service received by the appellants.
2. The learned Counsel appearing for the appellants submits that in the appellants own case for the earlier period on the same issue, a Division Bench of this Tribunal has decided the issue in favour of the appellant vide Order No. A/399-402/2010/EB dated 01.12.2010 wherein this Tribunal has observed as under:-
2. The Ld. Advocate appearing for the appellants states that the issue involved in all the four appeals is that whether restriction on distribution of input credit relation to one unit of a manufacturer/service provider to another unit of the same manufacturer/service provider is required to be applied.
3. The Ld. SDR agrees that this is the issue involved in all these appeals. We find that this issue stands settled by the Tribunals order in the case of M/s. Ecof Industries Pvt. Ltd. Vs. CCE, Bangalore, 2009-TIOL-2109-CESTAT-BANG holding as follows;-
The combined reading of the Rule 7 and the clarificatory Circular dated 23.08.2007 clearly shows that there are only two restrictions regarding the distribution of the credit. The first restriction is that the credit should not exceed the amount of Service Tax paid. The second restriction is that the credit should not be attributable to services used in manufacture of exempted goods or providing of exempted services. There are no other restrictions under the rules. The restrictions sought to be applied by the Department in this case in limiting the distribution of the Service Tax credit made in respect of the Malur Unit on the ground that the services were used in respect of the Cuttack Unit finds no mention in the relevant rules. As such, restricting the distribution of Service Tax credit in a manner as has been done by the impugned order of the lower appellate authority (original authority had approved of such distribution) cannot be upheld. In case the Department wants to place such restriction as is sought to be placed in the case, the rule is required to be amended.
4. Hence, following the ratio of the above cited decision, we waive the requirement of pre-deposit in all the appeals, set aside the impugned orders and allow the appeals. 2.1 The learned Counsel further submitted that in the case of Mercedes Benz India Pvt. Ltd., vs Union of India - 2010 (252) ELT 168 (Bom.), the Honble High Court of Bombay held that the Tribunal has to follow the order passed by another co-ordinate bench in the identical set of facts for the earlier period and prays that following the ratio of the above decision, their appeals be allowed.
3. On the other hand, the learned A.R. for the Revenue strongly opposed the contention of the learned Counsel and relied on the judgments of the Honble Supreme Court in the case of Maruti Suzuki Ltd. vs. CCE Delhi III 2009 (240) ELT 641 (S.C.), Honble High Court of Gujarat in the case of CCE & Cus. vs. Gujarat Heavy Chemicals Ltd.-2011 (22) STR 610 (Guj) and this Tribunas stay order No. S/116/WZB/Mum/2011/ SMB Cr.IV dated 12.10.2011 in the case of M/s. Mahindra & Mahindra Ltd. It is further pointed out by the learned A.R. that while deciding the appellants case on the earlier occasion by the Division Bench, this Tribunal has not considered the decision of Maruti Suzuki Ltd. (supra) in respect of service tax paid on input/input services and prayed that the appeals filed by the appellants be dismissed.
4. Heard both sides.
5. Considering the submissions made by both sides I find that in the case of Mercedes Benz India Pvt. Ltd. (supra) the Honble High Court of Bombay has observed that 17. We are not happy to observe but constrained to say that one must remember that pursuit of the law, however glamorous it is, has its own limitation on the Bench. In a multi-judge court, the Judges are bound by precedents and procedure. They could use their discretion only when there is no declared principle to be found, no rule and no authority. The judicial decorum and legal propriety demand that where a learned single judge or a Division Bench does not agree with the decision of a Bench of co-ordinate jurisdiction, the matter should be referred to a larger Bench. It is a subversion of judicial process not to follow this procedure. In our system of judicial review which is a part of our Constitutional scheme, we hold it to be the duty of the judges of the courts and members of the tribunals to make the law more predictable. The question of law directly arising in the case should not be dealt with apologetic approaches. The law must be made more effective as a guide to behaviour. It must be determined with reasons which carry convictions within the Courts, profession and public. Other-wise, the lawyers would be in a predicament and would not know how to advise their clients. Subordinate courts would find themselves in an embarrassing position to choose between the conflicting opinions. The general public would be in dilemma to obey or not to obey such law and it, ultimately, falls into disrepute. These are the observations made by the Apex Court in Sundarjas Kanyalal Bhathija vs. Collector, Thane, AIR 1990 S.C.261.
18. The Apex Court also had an occasion to notice similar impropriety in the case of Lala Shri Bhagwan Vs. Ram Chand, AIR 1965 S.C. 1767; wherein it was observed as under:
It is hardly necessary to emphasize that considerations of judicial propriety and decorum require that if a learned single judge hearing a matte is inclined to take the view that the earlier decisions of the High Court, whether of a Davison Bench or of a single Judge, need to be reconsidered, he should not embark upon that enquiry sitting as a signal judge, but should refer the matter to a Division bench or, in a proper case, place the relevant papers before the Chief Justice to enable him to constitute a larger Bench to examine the question. That is the proper and traditional way to deal with such matters and it is founded on healthy principles of judicial decorum and propriety. It is to be regretted that the learned single judge departed from this traditional way in the present case and chose to examine the question himself. The similar expressions are to be found in the case of Mahadeolal Kanodia v. The Administrator General of West Bengal, AIR 1960 SC 936 (at p.941); wherein it is observed:
We have noticed with some regret that when the earlier decision of two judges of the same High Curt in Dearajins case, 58 Cal. WN 64 AIR 1954 Cal 119 was cited before the learned judges who heard the present appeal they took on themselves to say that the previous decision was wrong, instead of following the usual procedure in case of difference of opinion with an earlier decision of referring no less than legal propriety from the basis of judicial procedure. If one thing is more necessary in law than any other thing, it is the quality of certainty. That quality would totally disappear if Judges of co-ordinate jurisdiction in a High Court start overruling one anothers decision.
19. Having said so, the impugned view taken by the Tribunal by no means can be said to be correct approach. Needless to mention that if the Tribunal wanted to differ to the earlier view taken by the Tribunal in the identical set of facts, the judicial discipline required reference to the larger bench. One co-ordinate bench finding fault with another co-ordinate bench is not a healthy way of dealing with the matters. In this view of the matter, we have no option but to set aside the impugned judgment passed by the Tribunal on 20th November, 2009 incorporated at Exh.A to the petition. Therefore, as in the appellants own case for the earlier period on an identical issue wherein this Tribunal held that the appellants are entitled for input service credit and as held by the Honble High Court of Bombay in the case Mercedes Benz India Pvt. Ltd. (supra), I am not required to go into the details of arguments advanced by the learned A.R. in this matter. Therefore, following the precedent decisions of this Tribunal in the appellants own case, I allow the appeals filed by the appellants by setting aside the impugned orders.
(Dictated in Court) (Ashok Jindal) Member (Judicial) nsk 7