The Principal Commissioner vs. M/S Alembic LTD (Real Estate Disivion)

Held

The Court held that the question of law proposed by the Revenue was no longer res integra, citing its own decision in Principal Commissioner vs. M/s Alembic Ltd [R/Tax Appeal No.140 of 2019 decided on 12th April 2019]. The Court noted that the Tax Appeal in the cited case arose from the very same CESTAT order that was the subject of the present appeal. The ratio of the previous decision was that once an assessee is not required to reverse any credit availed on valid input services during the period from 2010 until obtaining a completion certificate, any amounts reversed by the assessee under protest cannot be retained by the Revenue authorities and must be refunded. Therefore, the present appeal was dismissed based on this precedent.

Facts

The Principal Commissioner of Customs, Excise and Service Tax (Revenue) filed a Tax Appeal before the Gujarat High Court challenging an order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad. The CESTAT's order, dated 23rd October 2018, granted relief to M/s Alembic Ltd (Real Estate Division) (Petitioner). The appeal was filed under Section 35G of the Central Excise Act, 1944, read with Section 174(2) of the Central Goods and Service Tax Act, 2017. The dispute pertains to the admissibility of Cenvat Credit and the maintenance of separate records for taxable and exempted services.

Key Issues

1. Whether the CESTAT's final order is in accordance with law, considering it granted relief without taking cognizance of Rule 6(1) of the Cenvat Credit Rules, 2004, concerning the admissibility of Cenvat Credit? 2. Whether the CESTAT's order failed to consider Rule 6(2) of the Cenvat Credit Rules, 2004, regarding the maintenance of separate records for providing taxable and exempted services, and the procedures under Rule 6(3) when separate records were not maintained? 3. Whether the CESTAT's order failed to consider Rule 2(I) of the Cenvat Credit Rules, 2004, pertaining to "input service"? Arguments: Petitioner (Revenue): Argued that the CESTAT granted relief without properly considering the relevant Cenvat Credit Rules, specifically Rules 6(1), 6(2), 6(3), and 2(I), which deal with the admissibility of credit, maintenance of separate records for taxable and exempted services, and the definition of input service. Respondent (M/s Alembic Ltd): The judgment does not explicitly record arguments made by the respondent, but it refers to a previous decision of the same court in a similar case involving the same parties and the same CESTAT order.