2011 (4) TMI 824 - AT - Service Tax

Tribunal Upholds Assessee's Interpretation of Central Excise Act

The Tribunal upheld the Commissioner's decision in favor of the assessee regarding the interpretation of Section 35A (3) of the Central Excise Act, 1944 ... Refund of unutilized Cenvat credit - Held that:- Perusing list of input service and its nexus submitted by the appellant in the Grounds of Appeal and in the light of the Board's Circular No. 120/1/2010ST dated 19.01.2010 and hold that out of the above cited input services certain input services are essential service and are eligible for refund except the service Air travel service is not essential for the output service and not eligible for refund - Therefore direct the lower authority to re-examine the rejected eligible input services for consideration of eligibility of refund claim subject to submission of CA's certificate, as required under Board's circular - Appeal is allowed by way of remand. Issues:1. Interpretation of Section 35A (3) of the Central Excise Act, 1944 in relation to service tax.2. Refund of unutilized Cenvat credit on input services, particularly Air travel service eligibility.Analysis:1. The judgment revolves around the interpretation of Section 35A (3) of the Central Excise Act, 1944 concerning service tax. The Revenue filed an appeal against an order by the Commissioner modifying an original authority's decision and granting relief to the respondents. The appeal was based on the contention that the Commissioner's order remanding the matter to the original authority was contrary to Section 35A (3). The Revenue argued that the Commissioner (Appeals) lacked the power of remand as clarified by CBEC through an instruction dated 18.2.2010.2. The impugned order modified the original authority's decision, which had denied the refund of unutilized Cenvat credit on various input services, except Air travel service. The Commissioner's order clarified the eligibility of certain input services for refund, excluding Air travel service. The Commissioner directed the lower authority to re-examine the rejected eligible input services for the refund claim, subject to specific requirements. The Commissioner's order was in favor of the assessee, and no issue was remanded to the original authority. The Tribunal found that the impugned order did not warrant interference at that stage and rejected the stay application.In conclusion, the judgment addressed the interpretation of Section 35A (3) of the Central Excise Act, 1944 in the context of service tax and the eligibility of refund for unutilized Cenvat credit on input services. The Tribunal upheld the Commissioner's decision in favor of the assessee and rejected the Revenue's appeal, emphasizing that no remand was made to the original authority.