2017 (5) TMI 1502 - HC - Service Tax

Whether the CESTAT was justified in allowing the abatement under the Notification No.15/2004-ST dated 10.9.2004 as amended without passing a speaking order? - Held that - the Tribunal was not justified in allowing the abatement under Notification No.15/2004-ST dated 10.09.2004 as amended through the order impugned in this Appeal which is a non-speaking one on the relevant issue. The Revenue is entitled to an opportunity of consideration of its submissions on facts and in law by the CESTAT. Accordingly the impugned order is only to set aside and an order of remit is made thereby restoring the case. Appeal allowed by way of remand.

Summary

Issues Involved:
Interpretation of provisions under Section 35G of the Central Excise Act, 1944 regarding abatement under Notification No.15/2004-ST dated 10.09.2004 without passing a speaking order.

Detailed Analysis:

1. The High Court admitted an appeal under Section 35G of the Central Excise Act, 1944, based on a substantial question of law formulated regarding the justification of allowing abatement under Notification No.15/2004-ST without a speaking order. The question arose due to the lack of reversal of credit availed on input services before claiming the abatement, as well as the absence of separate accounts for input services utilized in rendering specific services.

2. The Revenue contended that the order of the CESTAT did not provide grounds for the reversal of the original order and highlighted that the assessee raised the issue of credit reversal for the first time before the CESTAT. The Department emphasized the necessity for maintaining separate records for input service credit related to 'Commercial or Industrial Construction Service' and questioned the timing of availing Input Tax Credit after the abatement.

3. Upon examination of the impugned order and the original order, the High Court acknowledged the Revenue's arguments and concluded that the CESTAT did not adequately consider the submissions made by the Revenue. Consequently, the High Court set aside the impugned order and remitted the case back to the CESTAT for a fresh consideration, emphasizing the importance of factual and legal review by the tribunal.

4. The High Court held that the Tribunal was not justified in allowing the abatement through a non-speaking order, as it failed to address the essential issue raised by the Revenue. The decision to remit the case for de novo consideration by the CESTAT was made to ensure a comprehensive review of the facts and legal arguments presented by the parties.

5. In conclusion, the High Court directed the parties to appear before the Tribunal for the reconsideration of the case in accordance with the law. The judgment highlighted the significance of providing reasoned decisions and considering all relevant submissions to ensure a fair and just adjudication of the matter.