Case Details: Commissioner of Central Excise, Mangalore Versus Syndicate Bank (2025) 30 Centax 22 (S.C.)
Judiciary and Counsel Details
- J.B. Pardiwala & R. Mahadevan, JJ.
- S/Shri Rupesh Kumar, Sr. Adv., N Venkataraman, A.S.G., V. Chandrashekara Bharathi, A K Kaul, Ms Sweksha, Siddhesh Kotwal, Sought Mishra, Raman Yadav, Advs. & Gurmeet Singh Makker, AOR, for the Appellant.
- S/Shri T. Suryanarayana, Sr. Adv., Mrs Yugandhara Pawar Jha, Ms Lavanya Dhawan, Ms Yasha Goyal, Advs. & Kunal Verma, AOR, for the Respondent.
Facts of the Case
The assessee, a banking entity providing Banking and Financial Services, Business Auxiliary Services, and Renting of Immovable Property Services, was under investigation by the Revenue. A show cause notice (SCN) was issued, alleging irregular availment of CENVAT credit and short payment of service tax. The SCN proposed the recovery of inadmissible credit and differential tax, along with interest and penalties. After adjudication, the Department confirmed the demand for wrongly availed credit and service tax, and imposed penalties under Section 76 of the Finance Act, 1994 and Rule 15(3) of the CENVAT Credit Rules, 2004.
The assessee appealed before the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) concerning the issue of CENVAT credit. The Tribunal favoured the assessee, determining that CENVAT credit was admissible on input services availed.
The Revenue, aggrieved by the Tribunal’s decision, filed an appeal before the Supreme Court. The Revenue raised five key issues: (i) admissibility of CENVAT credit, (ii) short payment of service tax on commission received in advance, (iii) taxability of debit card income, (iv) taxation of banking and financial services provided in Jammu and Kashmir, and (v) renting of immovable property.
The Revenue contended that while the Tribunal had addressed the first issue, the remaining four issues had not been discussed in detail. Instead, the Tribunal had simply relied on precedent decisions and ruled in favour of the assessee without offering sufficient reasoning or analysis on these issues.
Supreme Court Held
The Hon’ble Supreme Court upheld the Tribunal’s decision on the admissibility of CENVAT credit in favour of the assessee. However, it noted that the remaining four issues had not been adequately addressed. The Court permitted the Revenue to file an application before the CESTAT for a detailed discussion and resolution of these issues. The CESTAT was directed to decide the application within eight weeks. The Court emphasised that the findings on CENVAT credit should remain intact, while the other issues required further adjudication.
List of Cases Reviewed
- Syndicate Bank v. Commissioner — 2022 (58) G.S.T.L. 440 (Tri. – Bang.) — Affirmed [Paras 1, 4, 11, 8, 10]
