Case Law Details
Kohler India Corporation Pvt Ltd Vs Commissioner of Central Excise and Service Tax – CGST & Central Excise Vadodara-II (CESTAT Ahmedabad)
The issue has been considered and directed to be decided by the Tribunal in the earlier round of litigation. It holds that consecutive hearing dates in the same month is no effective hearing. Hence, directs the Ld. commissioner to pass order in two months.
The appellant is a leading manufacturer of ceramic and other bathroom fittings. It received certain input services used for construction of factory building. Credit was denied on the ground that there is no excise duty paid on the said building (immovable property). Demands were confirmed. On appeal, the Hon’ble CESTAT remanded the matter back to the commissioner for passing an order considering the law has been settled by the High courts. However, yet again, same order came to be passed. Hence, appeal before the Hon’ble CESTAT.
The Hon’ble CESTAT, Ahmedabad allows the appeal and remands the matter back to the commissioner. It lambasts the Ld. Commissioner for passing verbatim order and not following earlier remand directions. It refers to the Hon’ble Supreme Court judgment in the case of Kamlakshi Finance holding that decision of higher authorities are binding on lower authorities. It holds that the issue has been considered and directed to be decided by the Tribunal in the earlier round of litigation. It holds that consecutive hearing dates in the same month is no effective hearing. Hence, directs the Ld. commissioner to pass order in two months.
The matter was argued by Ld. Counsel Bharat Raichandani
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The issue involved in the present case is that whether the appellant is entitled for the Cenvat Credit in respect of various services in question i.e. ‘erection, commissioning or installation service’ and ‘real estate agent service’ which have been used in the construction of the factory building. The Learned Commissioner has disallowed the Cenvat Credit on this service on the ground that the factory building for which the said service was received is neither an output service nor subject to Central Excise duty.
2. Shri Bharat Raichandani, Learned Counsel appearing on behalf of the appellant at the outset submits that this is second round of appeal in the first round of Appeal No. E/11560/2013-DB this Tribunal vide Final Order No. A/11734/2022 dated 23.11.2022 had remanded the matter with a specific direction to the adjudicating authority for passing a fresh However, the adjudicating authority has passed an order which is verbatim to the earlier Order-In-Original No. 24-COMMR-SURAT-II-2013 dated 22.02.2013, the adjudicating authority has neither followed the direction of this Tribunal nor considered the judgments cited before the Tribunal. Therefore, the impugned order is completely in a gross violation of principles of natural Justice. He argued in detail on merits of the case. He reiterates the grounds of appeal.
3. Shri Rajesh Nathan, Learned Assistant Commissioner (AR) appearing on behalf of the revenue, reiterates the findings of the impugned
4. We have carefully considered the submissions made by both the sides and perused the record. We find that this is second round of appeal, in the first round of appeal this Tribunal has passed the order No. A/11734/2022 dated 11.2022, the finding of the said order is reproduced below:-
“6. We have carefully considered the submissions made by both the sides and perused the records. We find that this appeal pertains to the period February 2008 to June 2009, the adjudicating authority decided the matter on the basis of old theory of law that services are related to the immovable properties hence Cenvat credit is not admissible. We find that subsequently, the various high courts and tribunals have given decisions in various judgments cited by the learned counsel for the appellant on this issue. The entire finding of the adjudicating authority is based on old theory of law and subsequently, much water was flown on the issue. We are of the view that the adjudicating authority needs to give a fresh look in the entire case in the light of the various judgements given subsequent to the passing of the impugned order.
6.1 We also find that the adjudication authority in respect of most of the services denied the credit on the ground that there is no nexus between the services with the manufacturing activity of appellant and clearance of the goods or for their business activity. We find that all the services per se are prima facie input services held in various judgments, however, the admissibility of Cenvat credit on these services can be decided on the basis that whether the services were used for the purpose specified in the definition of input service. Therefore, we are of the view that the entire matter needs to be re-considered
7. Accordingly, we set aside the impugned order and allow the appeals by way of remand to the adjudicating authority for passing a fresh order.”
On going through the impugned order, we do agree with the submission of the Learned Counsel that the present impugned order is verbatim to the earlier order dated 22.02.2013 passed by the Learned Commissioner, Central Excise, Custom (Adjudication)-SURAT-II, therefore, there is absolutely no independent application of mind in passing the present impugned order. Moreover, the adjudicating authority has not followed the direction/ observation made by this Tribunal in the order dated 23.11.2022 as cited supra. It is further notice that the adjudicating authority has fixed three consecutive dates of hearing in one particular month and passed ex-parte order. Taking a stock of all the above incidence, it is clear that the learned adjudicating authority has neither complied the principles of Natural Justice nor followed the direction given by this Tribunal. It is a trite law that order of the higher authority is binding on the lower authority as held by the Hon’ble Supreme Court in the case of Union of India vs. Kamlakshi Finance Corporation Ltd. 1991 (55) ELT 433 (SC). Therefore, the present impugned order passed without applying the independent mind by the adjudicating authority cannot be sustained. Accordingly, we set aside the impugned order and once again remand the matter to the adjudicating authority for passing a fresh order. The adjudicating authority shall provide sufficient opportunity of personal hearing to the appellant with sufficient advance notice for each date of hearing.
5. Since, this is the second round of remand, the adjudicating authority shall pass a denovo order within a period of 2 months from the date of this The appeal is allowed by way of remand to the adjudicating authority.
(Operative portion dictated in the open Court)
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