2014 (5) TMI 102 - HC - Service Tax

Court deems Commissioner's order unsustainable, grants relief based on Tribunal decision. Observations not binding.

M/s. Ultratech Cement Ltd. Versus Union of India & Others

The Court found the Commissioner (Appeals) order directing payment of the entire service tax amount to be legally unsustainable. The petitioner was ... Demand of service tax - Disallowance of CENVAT Credit - Earlier passed in favour of assessee by Tribunal - Commissioner (Appeals) without taking note of the order of the Tribunal Mumbai Bench, still directed the petitioner to pay the entire amount of service tax - Held that:- order of the Commissioner (Appeals) impugned herein dt.27.01.2014 is not legally sustainable and the petitioner is entitled to get the protection as already being considered by the Tribunal Mumbai Bench pending appeal - Decided in favour of assessee. Issues:Challenge to disallowance of Cenvat credit of service tax paid on input services by the Adjudicating Authority and Commissioner (Appeals) directing payment of entire service tax amount.Analysis:The petitioner, a public limited company engaged in manufacturing cement products covered by the Central Excise Tariff Act, challenged the disallowance of Cenvat credit of service tax paid on input services. The Adjudicating Authority issued a notice under the Central Excise Act, which led to a challenge by the petitioner. The Tribunal Mumbai Bench's order was presented to support the petitioner's contention, but the Adjudicating Authority passed an order without assigning any reason. Subsequently, the Commissioner (Appeals) directed the petitioner to pay the entire service tax amount, disregarding the Tribunal's order. The petitioner sought parity based on the Tribunal's order in their case.During the Court proceedings, it was noted that no further appeal had been filed against the Tribunal's order. The Court clarified that it was not assessing the merits of the case pending before the Commissioner (Appeals) but considered the Tribunal's order in the petitioner's case. The Court found that the Commissioner (Appeals) order was legally unsustainable, and the petitioner was entitled to protection based on the Tribunal's decision.The Court emphasized that its observations were solely for the disposal of the writ petition and should not influence the authority's decision-making process. The authority was urged to expedite the appeal process in accordance with the law and the mutual agreement of the parties. Consequently, the writ petition was disposed of, granting relief to the petitioner while maintaining the independence of the authority in deciding the appeal.