Commissioner of Central Excise vs Golden Tabacco Ltd.

The Revenue has challenged the order dated 5-10-2012 passed on the Stay Application No. E/Stay/2160/2010-Mum in Appeal No. E/2001/2010/Mum. The issue involved in the appeal was whether the assessee has availed of the input credit service on the services which have been mentioned in Paragraphs 3 and 5 of the order under challenge. The service in this case was the rent-a-cab and which has been availed of for the purposes of transportation from the factory to warehouse. The argument is that this is input service and availed of in the course of business. Therefore, input service credit be extended. The Tribunal in an order containing only two paragraphs of reasoning strangely held that input credit service for the remaining services which are not availed of by the assessee in the course of business was denied. The assessee has not paid the input service credit availed on these services despite the order passed by the adjudicating authority. Therefore, the penalty of Rs. 2000/- is confirmed and at the same time, relying upon the judgment of this Court in the case of The Commissioner Central Excise Vs. Ultratech Cement Ltd. and The Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, the Tribunal held that the service availed of by the assessee, namely, rent-a-cab is entitled for extension of input service credit. In other words, that could be availed of. Therefore, the claim to the extent of Rs. 8,75,107/- has been allowed at the stage of hearing of the application for stay/waiver of pre-deposit. After perusal of this order with the assistance of the learned counsel appearing for the parties we are of the opinion that the present appeal does raise a substantial question of law. The appeal is, therefore, admitted 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 rent-a-car service, though the said rent-a-car service was rendered at various other places other than the factory and declared warehouse/depot of the respondent?

(2) Whether the CESTAT was right in holding that the rent-a-car service has been used by the respondent herein from their factory to going to the warehouse, factory and depot?

(3) Whether the rent-a-car service amounts to input service as defined under Rule 2(1) of the Cenvat Credit Rules, 2004?

(4) Whether the decision of this Court in The Commissioner Central Excise Vs. Ultratech Cement Ltd. and The Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, is applicable in the facts and circumstances of the present case?"

We had put it to the learned counsel that since the appeal raises these questions and the Tribunal has not dealt with them extensively, therefore, would it be fair, just and proper at this stage itself if the present appeal is allowed and the order of the Tribunal is quashed and set aside and the matter is remitted back to the Tribunal. The learned counsel appearing for the assessee fairly conceded that this approach may be adopted, but having faulted the order of the Tribunal the Assessee should not be saddled with payment of duty and penalty specially when it has an arguable case. The Tribunal having referred to the judgment of this Court in Ultratech Cement (supra), according to the learned counsel appearing for the assessee, this is a fit case for waiving the condition of pre-deposit and grant of unconditional stay. Since both sides have conceded that the Tribunal''s order can be set aside and the appeal be restored back to it''s file, we have heard the learned counsel only on the point of interim stay/waiver of condition of pre-deposit. In the facts and circumstances and peculiar to the case of the assessee we find that a arguable point has been made out. The Tribunal will have to consider the issue of applicability of the judgment of this Court in the case of Ultratech Cement (supra). Therefore, without creating any precedent and purely because the matter has been remitted and restored on account of faulty approach of the Tribunal that the assessee is relieved of the condition of pre-deposit. Thus, there will be total waiver of condition of pre-deposit and unconditional stay of recovery of the amount of duty and penalty and which is subject matter of the appeal before the Tribunal till the hearing and final disposal of the appeal by the Tribunal. The appeal is restored back to the file of the Tribunal by quashing and setting aside the impugned order dated 5-10-2012. Upon restoration the appeal shall be decided on its own merits and in accordance with law and uninfluenced by any earlier reasonings, findings and conclusions. All contentions of both sides on merits of the controversy are kept open. The Tribunal shall not be influenced by any of the findings in the present order as well. We have not touched the merits of the appeal at all. The appeal is allowed in the above terms. No costs.