Tribunal remands appeals for fresh decision based on pending departmental appeals. All issues left open.

The Tribunal allowed the appeals by remanding the matter to the original adjudicating authority for a fresh decision based on pending departmental appeals. No opinion on the merits was expressed, leaving all issues open for further consideration.

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Issues:
Reversal of Cenvat Credit on unsold units post completion certificate issuance.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal dated 02.06.2022 passed by the Commissioner (Appeals), Surat. The case involved a situation where the respondent had constructed flats in a project named "Atlantis," with some flats sold before the completion certificate (BUC) was issued, and the rest unsold post-BUC. The Revenue contended that the respondent should reverse the Cenvat credit on unsold units after BUC issuance. The Commissioner (Appeals) allowed the respondent's appeal, leading to the present appeal by the Revenue.

The Revenue argued that the respondent availed Cenvat credit for both taxable and exempted services without maintaining separate accounts, violating Rule 6 of the Cenvat Credit Rules, 2004. They emphasized that the respondent failed to follow the prescribed procedure for reversing Cenvat credit post-BUC issuance, necessitating the reversal as per Rule 6(3) of the Rules.

Moreover, the Revenue highlighted the legal position that if the law prescribes a specific manner of action, it must be followed accordingly, citing the case of JK Housing Board vs. Kunwar Sanjay Kishan Kaul. They also pointed out that the judgment in Principal Commissioner vs. Alembic Ltd. held that post-BUC issuance, the sale of residential units became "non-service," making the Cenvat credit inapplicable. The Revenue contended that allowing Cenvat credit in such circumstances was erroneous, as the benefit should not extend to activities classified as non-service.

The respondent, represented by an advocate, relied on the decision in M/s Alembic Ltd. to argue that the issue of reversing Cenvat credit on unsold units post-BUC had been settled in their favor. They noted that the Supreme Court had not granted a stay on the matter, making the Alembic decision applicable. The respondent also contested the remand by the Commissioner (Appeals), asserting that they had not availed any Cenvat credit post a specific date, urging the dismissal of the appeal.

After hearing both parties, the Tribunal observed that the matter was remanded solely for quantification by the Commissioner (Appeals). The Tribunal rejected the respondent's objection to the remand, emphasizing that without challenging the order through an appeal, the objection could not stand. Additionally, the Tribunal decided to remand the matter to the original adjudicating authority in light of pending departmental appeals, keeping all issues open for consideration without expressing any opinion on the merits.

In conclusion, the appeals were allowed by remanding the matter to the original adjudicating authority, with a clear directive to decide afresh based on the outcome of the pending departmental appeals. The Tribunal clarified that no opinion on the merits was expressed, leaving all issues open for further consideration.

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