Commissioner of Central Excise vs Golden Tabacco Ltd.

This is a Revenue''s Appeal challenging the order passed by the Customs, Excise and Service Tax Appellate Tribunal on an application for stay. The application for stay in Appeal No. E/2002/2010/Mum was decided by the impugned order on 5-10-2012. However, instead of dealing with the application for stay/waiver of pre-deposit the Tribunal has disposed of the Appeal itself and by a cryptic, so also, virtually unreasoned order, is the complaint of the Revenue.

On the other hand, the learned counsel appearing for the Assessee supports the order of the Tribunal by submitting that the Tribunal has followed the order delivered in the case of Idea Cellular Limited v. The Commissioner of Central Excise reported in 2011 (22) S.T.R. 450 (Tribunal). In that decision, the Tribunal held that insurance of vehicles, laptop and insurance for cash during its transit from the cash collection centre to the bank can be treated as input service and is entitled for input service credit. Therefore, the order passed cannot be termed as perverse or vitiated by any error of law apparent on the face of the record. The Appeal does not raise any substantial question of law and deserves to be dismissed.

What we have noted from perusal of two paragraph order and containing the reasoning virtually in one paragraph is that the Tribunal has failed to refer to the background facts. It has also not referred to the fact that whether the services and termed as input services in the case of Idea Cellular (supra) are identical or similar to one involved in the present case. We find some substance in the contentions of Mr. Rao, learned counsel appearing for the Revenue that in this case the factual situation is prima facie not identical. There, the issue was the credit on input services and of laptop, etc. In this case the issue involved was taking of service tax credit of insurance premium amount in respect of Baroda factory and residential premises at various locations all over India. The argument was that Cenvat credit was not admissible to Mumbai factory as Baroda factory was separate unit and that unit can avail the credit of service tax paid on such input services. The Mumbai Factory is not using or received any of input services in the factory at Mumbai, therefore, the credit is not admissible for the factory at Mumbai.

The Assessee may have or may be able to draw some support from the order passed by the Tribunal in the case of Idea Cellular (supra), but this aspect of the matter was vital and the Tribunal should have adverted to the rival contentions on the same and thereafter, passed a reasoned and proper order. That having not been done we ADMIT this Appeal on the following substantial questions of law:-

(1) Whether the CESTAT was correct in holding that the Respondent is entitled for input service credit with regard to payment of insurance premium?

(2) Whether the CESTAT was right in holding that the payment of insurance premium amounts to input service as defined under Rule 2(1) of the Cenvat Credit Rules, 2004?

(3) Whether the CESTAT was right in applying the ratio of Tribunal''s judgment in case of Ideal Cellular Limited v. Commissioner of Central Excise reported in 2011 (22) S.T.R. 450 in the present case?

The Respondent/Assessee waives service.

With the consent of the learned counsel appearing for the parties we dispose of this Appeal finally.

Having perused the order passed by the Tribunal and being totally dissatisfied with inadequate and crypt reasoning that the present Appeal is allowed. The impugned order of the Tribunal is quashed and set aside. The Appeal No. E/2002/10/Mum. is restored to the file of the Tribunal for being decided afresh and on merits and in accordance with law. We clarify that we have not expressed any opinion on the rival contentions and each of them are kept open for being raised before the Tribunal. The Tribunal shall decide the Appeal uninfluenced by any of its earlier reasoning, findings and conclusions.

Needless to clarify that even the stay application filed in the said Appeal is restored to the file of the Tribunal. This being the Assessee''s Appeal before the Tribunal, the Tribunal shall first permit the Assessee to seek waiver of pre-deposit/stay of recovery if the Assessee so desires. In the event the Tribunal finds that the arguments on both, the main appeal, so also, the stay application, are common and have been extensively canvassed it may decide the Appeal finally at the stage of consideration of the interim application, but in that event it shall assign cogent, satisfactory and complete reasons. The Appeal is disposed of in these terms. There will be no order as to costs.