2020 (4) TMI 444 - AT - Central Excise

Tribunal rules in favor of appellant, setting aside demand for Rs. 10,38,860 based on agreement. Discrepancies found in demand amount.

The Tribunal set aside the demand for the remaining amount of Rs. 10,38,860, ruling in favor of the appellant who correctly reversed Rs. 24,67,690 based ... Interpretation of the remand order of this Tribunal - CENVAT Credit - input services - Outdoor Catering Service - HELD THAT:- On going through the said remand order of this Tribunal, it is clearly mentioned that the adjudicating authority shall verify the figures also. On verification of the figures, as contended by the appellant that they have borne the cost of tea and snacks provided to the employees free of cost, for the same, the adjudicating authority was also required to consider to allow Cenvat credit for inputs/input services used to provide tea and snacks. For proper verification of the figures of Cenvat credit reversal by the appellant, the same has not been done by the adjudicating authority in the remand order - No contrary evidence has been produced by the Revenue in their support of their claim that they are required to reverse total amount of Cenvat credit of ₹ 35,06,550/-. The appellant has rightly reversed the amount of ₹ 24,67,690/- - demand of account of reversal Cenvat credit of ₹ 10,38,860/- do not sustain - penalty also set aside - appeal allowed - decided in favor of appellant. Issues:Interpretation of remand order regarding Cenvat credit on Outdoor Catering Service.Analysis:The case involved a dispute over the denial of Cenvat credit on Outdoor Catering Service for the period 2008-09 to 2010-11. The appellant had reversed a portion of the credit based on an agreement with the union regarding subsidized food charges. However, the appellant argued that they also provided tea and snacks to employees at no cost, entitling them to avail Cenvat credit for those expenses. The Tribunal had remanded the matter back to the adjudicating authority for re-quantification of the demand. In the remand proceedings, the Commissioner confirmed a balance amount of demand and imposed a penalty of Rs. 35,06,550 against the appellant, leading to the current appeal.The key issue revolved around the interpretation of the remand order by the Tribunal. The remand order required verification of figures, including consideration for allowing Cenvat credit for inputs/services used to provide tea and snacks. The adjudicating authority failed to properly verify these figures in the remand order, leading to discrepancies in the demand amount. The appellant had reversed Rs. 24,67,690 based on the agreement for subsidized food charges and provided a detailed chart showing no contrary evidence supporting the total demand of Rs. 35,06,550 claimed by the Revenue.After thorough consideration, the Tribunal held that the appellant had correctly reversed Rs. 24,67,690 and found no merit in the demand for the remaining Rs. 10,38,860. Consequently, the impugned order regarding this demand was set aside, and no penalty was imposed on the appellant. The appeal was disposed of accordingly, providing relief to the appellant based on the proper interpretation of the remand order and the evidence presented regarding Cenvat credit reversal for Outdoor Catering Service.