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2019 (10) TMI 1029 - SC - Indian LawsJurisdiction of arbitrator to consider the counter claim relating to CENVAT credit - dispute arose between the parties when the appellant raised a claim for interest for the delayed payments of the fuel supplied during the period from 01.04.2009 to 31.03.2011. Whether the counter claim regarding CENVAT invoices was beyond the scope of reference to arbitration? - whether the High Court was right in holding that the learned Arbitrator had jurisdiction to consider the counter claim regarding CENVAT invoices raised by the respondent? HELD THAT:- The respondent did not make any claim of CENVAT invoices and only for the first time on 05.05.2010 that is after the commencement of the arbitration proceeding, the respondent called upon the claimant to issue CENVAT invoices. According to the appellant, as per the terms of the agreement, the appellant was not bound to issue CENVAT invoices to the respondent and levy of service tax on domestic air travel came into force only by the Finance Act, 2010 and therefore, the learned Arbitrator has rightly held that the counter claim is beyond the specific reference and would not fall within the jurisdiction of the Arbitrator. The questions whether the issue regarding CENVAT invoices was outside the terms of agreement or whether CENVAT invoices relates to the agreement dated 01.01.2007 and 01.04.2009 and whether it is arbitrable and whether it falls beyond the scope of reference to arbitration and such other related questions, are to be determined only during the enquiry. It may be that after enquiry, the Arbitrator might reject the counter claim for CENVAT invoices as not arbitrable and the counter claim beyond the scope of reference to arbitration. But to reject the counter claim at the threshold on the ground that the Arbitrator has no jurisdiction would not be proper. The High Court has rightly set aside the order of the learned Arbitrator dated 18.04.2011 - the impugned judgment of the High Court of Bombay is affirmed - Appeal dismissed.
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