2008 (11) TMI 179 - AT - Central Excise

Appellate Tribunal discharges show cause notices on Cenvat credit denial

The Appellate Tribunal CESTAT, Mumbai, discharged show cause notices regarding the denial of Cenvat credit on input services. The tribunal found that ... Appeal filed in wrong form – EA-3 form versus ST-5 form - regarding denial of Cenvat credit on input services - an appeal filed in ST-5 format appears to be maintainable more-so when an appeal in ST-4 form was admitted by Commissioner (Appeals). The show cause notices are therefore discharged. It is however made clear that no view is being expressed on the merits of the case as to whether a demand relating to denial of credit on input services is required to be raised under Section 11A of Central Excise Act, 1944 or Section 73 of the Finance Act, 1994 appeal is maintainable. Issues: Appeal format for filing show cause notices regarding denial of Cenvat credit on input services.Analysis:The appellants were issued four show cause notices requiring them to file appeals in EA-3 form instead of ST-5 form under which the appeals were filed. The advocate for the appellants argued that the issue involved in the appeals is the denial of Cenvat credit on various services, and thus, the appeal in ST-5 form was appropriate as the demand should be issued under Section 73 of the Finance Act. He also mentioned that an appeal in ST-4 form was previously accepted by the Commissioner (Appeals) without any objection, indicating that filing in EA-3 form was unnecessary.The Departmental Representative (DR) contended that as per Rule 14 of the Cenvat Credit Rules, a show cause notice should be issued under Section 11A for manufacturers and under Section 73 for output service providers. Since the appellant was a manufacturer, the appeals should have been filed in EA-3 format.After considering the submissions, the Member (T) found that the issue pertained to the denial of Cenvat credit on input services, making the appeal filed in ST-5 format maintainable, especially given the previous acceptance of an appeal in ST-4 form by the Commissioner (Appeals). Consequently, the show cause notices were discharged. However, it was clarified that no opinion was expressed on whether a demand related to the denial of credit on input services should be raised under Section 11A of the Central Excise Act or Section 73 of the Finance Act.The judgment was pronounced on 7-11-2008 by Shri K.K. Agarwal, Member (T) of the Appellate Tribunal CESTAT, Mumbai.