Commissioner of Central Excise, Pondicherry vs CESTAT, Chennai

R. Sudhakar, J—Aggrieved by the order of the Tribunal in allowing the respective appeals filed by the assessee, the Revenue/appellant is before this Court by filing the present appeals. While admitting the appeals, this Court framed the following substantial questions of law for consideration in the respective appeals:-

"CMA No. 2035/2008

Whether the first respondent is correct in disregarding the Board circular No. 345/4/2005 TRV dated 3-10-2005 while deciding the appeals when it has been held by the Apex Court and other High Courts that the interpretation of the Central Board of Excise and Customs will be binding upon the Revenue?

Whether the Tribunal is justified in ignoring the words ''the person liable for paying service tax does not manufacture final products'' appearing in the explanation to Rule 2(p) of the Cenvat Credit Rules according to which the GTA service cannot be termed as ''Output Service''?"

"CMA No. 1599/2010

Whether the Hon''ble Tribunal is right on relying on its own decisions passed in the case of India Cements Ltd. v. CCE, Salem [2007 (7) S.T.R. 569 ] and R.R.D. Tex Pvt. Ltd. vs. Commissioner of Central Excise(2007) 10 STJ 151 as a finality has not reached and the cited judgments has been challenged by the department and appeal has been filed against them?

Whether the Tribunal is right in not considering that the assessee had not provided any ''output services'' and had received services during the disputed period and they are not entitled to utilise input service tax credit for payment of service tax on Goods Transport Agency Services availed in connection with removal of final product from their factory as per Rule 2(p) of the Cenvat Credit Rules, 2004?"

The case of the respective respondent/assessee is that they filed ST-3 Returns for the respective periods and, thereafter, utilised the Cenvat credit so accrued for payment of service tax and education cess respectively in relation to freight for inward movement of goods received by them. However, after due process of law, the Adjudicating Authority as well as the Commissioner (Appeals) held against the assessee confirming the demand along with interest inasmuch as the assessees have not discharged the duty liability as envisaged under the Act and the Rules. Against the said order, the appeals preferred by the respective assessees were allowed by the Tribunal against which the Revenue is before this Court by filing the present appeals.

Though the appeals have been admitted on two substantial questions of law, at the time of hearing the main appeals, this Court felt that the second substantial question of law alone requires to be considered in both the appeals, which was fairly accepted by the learned counsel on either side. Accordingly, this Court is considering only the second substantial question of law in both the appeals.

It is brought to the notice of this Court by the learned counsel appearing for the parties that similar question has been considered by this Court in the case of Commissioner of Commissioner of Central Excise, Salem Vs. Cheran Spinners Limited, (2014) 43 GST 274 : (2014) 24 GST 296 : (2014) 24 GSTR 296 : (2014) 33 STR 148 : (2013) 66 VST 312 and the issue has been answered against the Revenue and in favour of the Assessee. It is submitted that the cases on hand is squarely covered by the decision in Cheran Spinnner''s case (supra).

In view of the said statement made by the learned counsel on either side that the ratio laid down in Cheran Spinner''s case (supra), is equally applicable to the cases on hand, following the said ratio, these appeals are also liable to be dismissed. Accordingly, the second substantial question of law is answered in favour of the respective assessee/respondent and against the Revenue/appellant. Accordingly, these civil miscellaneous appeals fail and the same are dismissed. However, in the circumstances of the case, there shall be no order as to costs.