Commissioner Of Central Excise, Delhi-Iii vs. M/S Chang Yun INDIA LTD.

Held

The High Court dismissed the appeal as not maintainable, citing a Circular dated 11.07.2018 issued by the Central Board of Indirect Taxes & Customs (Judicial Cell) which stipulates that appeals involving amounts less than a certain limit should not be filed. The amount in dispute was ₹40,06,525/-, which was below the prescribed limit. The Court explicitly stated that the dismissal of the appeal would not be taken as upholding the order passed by the Tribunal. The legal issues raised in the appeal were left open to be considered in an appropriate case. Therefore, none of the substantial questions of law were decided on merits.

Facts

The appellant, Commissioner of Central Excise Delhi-III (now Commissioner of Goods and Services Tax, Gurugram), challenged an order dated 05.06.2017 passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh. The appeal involved an amount of ₹40,06,525/-. The appellant argued that the CESTAT's order was against the law, perverse, illegal, and a non-speaking order. Specifically, it was contended that CENVAT credit was wrongly allowed for services like 'repair & maintenance', 'architecture', 'training', and 'rent service' when these services were also utilized by a sister concern or not directly linked to the manufacturing process. The appellant also questioned the CESTAT's reliance on debit notes not mentioned in Rule 9 of the CENVAT Credit Rules, 2004, and its failure to establish a nexus between the services and the assessee's business, citing the Supreme Court case of Maruti Suzuki Ltd. The appellant also argued that the CESTAT wrongly relied on the judgment in Ultratech Cement Pvt. Ltd. The respondent is M/s Chang Yun India Ltd. The appeal was filed before the High Court of Punjab and Haryana at Chandigarh.

Key Issues

1. Whether the impugned order dated 05.06.2017 passed by the CESTAT is against the law and untenable? (Question of law) 2. Whether the impugned order dated 05.06.2017 passed by the CESTAT is perverse and illegal, as it allowed CENVAT Credit for services ('repair & maintenance', 'architecture', 'training') admittedly used by a sister concern, despite the adjudicating authority's findings? (Question of mixed law and fact, turning on the interpretation of CENVAT Credit Rules) 3. Whether the impugned order dated 05.06.2017 passed by the CESTAT is a non-speaking order based on surmises, allowing CENVAT Credit for 'rent service' when part of the premises was sub-leased to a sister concern, lacking nexus with the manufacturing process? (Question of mixed law and fact, turning on the interpretation of CENVAT Credit Rules) 4. Whether the CESTAT was justified in not considering Rule 9 of the CENVAT Credit Rules, 2004, which specifies the documents for claiming CENVAT Credit? (Question of law) 5. Whether the CESTAT committed a grave error in allowing CENVAT Credit based on debit notes not mentioned in Rule 9 of the CENVAT Credit Rules, 2004? (Question of law) 6. Whether the CESTAT overlooked the legal provision requiring a nexus between services rendered and the business carried on by the assessee to avail CENVAT credit, as upheld in Maruti Suzuki Ltd.? (Question of law) 7. Whether the CESTAT committed a grave error in relying on the judgment in Ultratech Cement Pvt. Ltd., which was under challenge before the Supreme Court and had different facts? (Question of law) Petitioner's Contentions: The appellant argued that the CESTAT's order was legally flawed, perverse, and non-speaking. They contended that CENVAT credit was wrongly allowed for services partly used by a sister concern or lacking a direct nexus with manufacturing, citing Rule 9 of the CENVAT Credit Rules, 2004, and the Supreme Court's decision in Maruti Suzuki Ltd. They also argued against reliance on the Ultratech Cement Pvt. Ltd. judgment. The appellant also raised a preliminary objection that the appeal should be dismissed as not maintainable due to the amount involved being less than the prescribed limit in a Circular dated 11.07.2018 issued by the Central Board of Indirect Taxes & Customs (Judicial Cell). Respondent's Contentions: The judgment does not record any specific contentions made by the respondent, M/s Chang Yun India Ltd.