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2021 (2) TMI 1104 - HC - Central ExciseValidity of Direction of the Tribunal to issue fresh SCN - demand beyond the scope of original SCN - power of Tribunal in making certain observations with regard to the validity of the CENVAT Credit Rules, 2004 qua the provisions of Section 37 of the Act - validity of proceeding to direct the original authority to issue a show cause notice to the appellant/assessee as regards its very entitlement for CENVAT credit - HELD THAT:- The Tribunal appears to have suo motu taken up for consideration as to whether credit of service tax paid or payable on taxable service is allowable. The Tribunal suo motu proceeded to refer to Section 37(2), Section 11AB of the Act and made certain observations, which are in the nature of conclusive observations. The learned counsel for the assessee had argued that the assessee had been put on notice only regarding the issue whether the debit note is an eligible document or not and not on the question whether the impugned taxable service is an eligible input service or an ineligible input service. After noting this submission, the Tribunal while remanding the matter to the Original Authority following the decision in Pharmalab Process Equipments Pvt., Ltd. [2009 (4) TMI 142 - CESTAT AHMEDABAD ], where it was held that debit notes issued by service providers contained details of service tax payable, description of taxable service, value of taxable service and registration number of service provider and name and address of service provider, which are the details required as per Rule 9(2) of the CCR, 2004, issued one more direction to the Original Authority to issue a fresh show cause notice as to whether the impugned services are eligible input services or not. The assessee is aggrieved over such direction. Experts explain Debit notes to be a form of proof that one business has created a legitimate debit entry in the course of dealing with another business. This might occur when a purchaser returns materials to a supplier and needs to validate the reimbursed amount. In this case, the purchaser issues a debit note reflecting the accounting transaction. Debit notes and credit notes are almost always involved in business-to-business (B2B) transactions. They correspond to debit and credit entries in accounting logs, which further serve as proof of a prior business transaction. They may also be referred to as debit memos - A debit note or debit receipt is very similar to an invoice. The main difference is that invoices always show a sale, where debit notes and debit receipts reflect adjustments or returns on transactions that have already taken place. B2B transactions are typically based on an extension of credit, where a vendor sends a shipment to a company before getting paid, then invoices the company for the amount owed after delivery. Debits and credits are the accounting method used to keep track of these transactions. Debit notes can also be substituted for traditional invoices when a good or service is provided that is outside of the normal scope of business. This helps distinguish the transaction for both accounting departments, and also keeps the issuing company from creating a new type of invoice. The endeavour before us by the Revenue to sustain the argument is by referring to the powers of the Tribunal and that the Tribunal would be entitled to examine all issues, when it seized of an appeal arising out of an order in original or an order in appeal. This submission is not well founded in the facts and circumstances of this case for more than one reason. Firstly, the appeal was filed by the assessee and not the Revenue. The Revenue did not prefer any cross appeal/objection. Therefore, the assessee cannot be worse off in its own appeal before the Tribunal. Further, the Tribunal has not recorded as to who had advanced such submission. In the absence of any such observation, we are compelled to observe that it is suo motu exercise by the Tribunal, which is uncalled for and without jurisdiction. We say so because, the allegation in the show cause notice, which gives the cause of action for the entire matter, is that the assessee availed service tax input credit based on ineligible documents - Therefore, the Department can never proceed beyond such allegation and if done so, it would be wholly without jurisdiction. In other words, the Tribunal cannot sustain the case of the Revenue against an assessee on a ground not raised by the Revenue either in the show cause notice or in the order in original passed by it. Thus, the direction issued by the Tribunal to issue a fresh show cause notice to the appellant/assessee as to whether the impugned services are eligible input services or not is wholly without jurisdiction and the same is liable to be set aside - appeal allowed - decided in favor of appellant.
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