2018 (2) TMI 1507 - HC - Central Excise

Court orders Tribunal to reconsider appeal on CENVAT credit for goods production, scrutinizing legal entity status and job work basis.

The court directed the Tribunal to reconsider the appeal concerning CENVAT credit for goods produced for a specific company, focusing on determining legal ... CENVAT credit - place of removal of the goods - Job work - whether the principal and job worker are independent legal entities - the Revenue appears to have been insisting that the contract documents as between M/s Parle Biscuits Private Limited and the respondent were not made available for adjudication before the departmental authorities or the Tribunal. Held that:- the fact of the matter remains that levy and sufferance of duty, taxes etc. are fiscal liabilities that add on, on the basis of the different transactions. Therefore, even if M/s Parle Biscuits Private Limited had a standard form contract, the decision rendered by the Tribunal in relation to a party who had or has transactions with that establishment could not have been applied without affirmatively holding that the particular transaction which forms the foundation and the substratum of a subsequent case is selfsame. The ends of justice require the Tribunal to reconsider the appeal filed before it by the respondent and which has given rise to the order dated 25.08.2015 which is challenged by the Revenue in this appeal - appeal disposed off. Issues:1. Appeal by Revenue regarding CENVAT credit for goods produced for a specific company.2. Determining legal entity status and job work basis in the contract between two companies.3. Consideration of standard form contracts and judicial precedents in similar transactions.4. Requirement for Tribunal to reconsider appeal and review order challenged by Revenue.Analysis:1. The appeal before the court pertains to the CENVAT credit related to goods produced for a specific company, M/s Parle Biscuits Private Limited. The key issue revolves around determining the legal entity status and whether the work carried out by the respondent company, M/s Ganesh Bakers Private Limited, for M/s Parle Biscuits Private Limited qualifies as job work basis. The crucial aspect is identifying the place of removal of goods, whether at the respondent's production point or at M/s Parle Biscuits Private Limited's godown.2. The court emphasizes that the determination of legal entity status and job work basis is primarily a question of fact dependent on the contract terms between the two companies. While acknowledging the existence of standard form contracts between M/s Parle Biscuits Private Limited and various entities, the court highlights that such issues cannot be solely decided as legal questions governed by precedents. The court notes the reliance on past decisions involving M/s Parle Biscuits Private Limited in similar transactions by both parties, emphasizing the need to assess each transaction's specifics.3. The court directs attention to the fact that the Revenue had not been provided with the contract documents between M/s Parle Biscuits Private Limited and the respondent during adjudication. Consequently, the court deems it necessary for the Tribunal to reconsider the appeal filed by the respondent, challenging the order dated 25.08.2015. The court sets aside the Tribunal's order and remits the case for further consideration, allowing the respondent to present all relevant submissions, including the applicability of precedents like Ultratech Cement Limited vs. Commissioner of Central Excise, Raipur.4. The court refrains from expressing any opinion on the merits of the arguments presented but stresses the importance of expediting the final hearing before the Tribunal. Both parties are to be given adequate opportunities to present additional materials and arguments. Ultimately, the court orders the appeal to be handled accordingly, emphasizing the need for a thorough reconsideration of the case by the Tribunal.