Principal Commissioner, Central Goods ... vs M/S Ilfs Cluster Development ... on 16 October, 2025

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Allahabad High Court

Principal Commissioner, Central Goods ... vs M/S Ilfs Cluster Development ... on 16 October, 2025

Bench: Saumitra Dayal Singh





HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 


Neutral Citation No. - 2025:AHC:185974-DB
 

 
HIGH COURT OF JUDICATURE AT ALLAHABAD 
 
CENTRAL EXCISE APPEAL No. - 16 of 2025   
 
   Principal Commissioner, Central Goods & Service Tax Noida    
 
  .....Appellant(s)   
 
 Versus  
 
   M/S Ilfs Cluster Development Initiative Ltd    
 
  .....Respondent(s)       
 
   
 
  
 
Counsel for Appellant(s)   
 
:   
 
Ramesh Chandra Shukla   
 
  
 
Counsel for Respondent(s)   
 
:   
 
Atul Gupta   
 
     
 
 Court No. - 3
 
   
 
 HON'BLE SAUMITRA DAYAL SINGH, J.

HON'BLE INDRAJEET SHUKLA, J.

1. Heard Sri Ramesh Chandra Shukla, learned counsel for the appellant and Sri Atul Gupta, learned counsel for the respondent.

2. Present central excise appeal arises from the order of the Central Excise and Service Tax Appellate Tribunal, Allahabad, dated 01.09.2024 whereby the learned Tribunal has allowed the assessee's appeal i.e. Service Tax Appeal No.70477 of 2019.

3. The present appeal filed by the revenue has been pressed in the following question of law:-

"(1) Whether in the facts and circumstances of the case, the Appellate Tribunal was correct and justified in allowing the appeal of the respondent wrongly drawing an inference that in the present case Commissioner have gone not only beyond the show cause notice/statement of Demand, by confirming the amounts under Rule 6(3) of CENVAT Credit Rules, 2004?"

4. We have heard learned counsel for the parties and perused the record.

5. Undeniably, the assessee was engaged in providing Vocational Training Service (VTS) for skill development to the youth below poverty line. Initially show cause notice dated 08.10.2012 was issued to the petitioner seeking to confirm demand of service tax on Vocational Training Service treating it to be a taxable service. Upon reply being filed and the matter being heard, consequently statement of demand for the period April, 2015 to June, 2016 was issued creating demand of service tax of Rs.26,70,73,002/-.

6. However, while adjudicating the issue the adjudicating authority reached to the conclusion that no demand of service tax may arise on Vocational Training Service, it being exempted service. Having reached that conclusion and having dropped that demand, it thereafter directed the respondent assessee to pay Rs.10,88,56,682/-, being reversal of CENVAT under Rule 6(3) of CENVAT Credit Rules, 2004, proportionate to the value of exempted service i.e. Vocational Training Service provided by the petitioner.

7. On appeal, the Tribunal has set aside the order creating that demand by reversing CENVAT on the reasoning that the said order was not preceded by and it was not referable to any show cause notice.

8. It is fundamental and indisputable in this branch of law that no demand of due tax may have arisen outside the scope of the show cause notice. To the extent, the adjudicating authority never proposed to reverse any part of the CENVAT availed by the assessee, it never became open to it to reverse the same while dealing with the issue of taxability or otherwise of Vocational Training Service.

9. In view of above, we find no error in the order of the Tribunal. The appeal lacks merit and is accordingly dismissed.

(Indrajeet Shukla,J.) (Saumitra Dayal Singh,J.) October 16, 2025 Shahroz

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