2015 (10) TMI 2534 - AT - Service Tax

Restoration of appeal - dismissed for non-prosecution - imposition of penalty - Department argued that the Order-in-Revision is only with regard to imposition of penalty, which was not a subject matter before the Commissioner (Appeals) and therefore the impugned Order-in-Revision is sustainable - Held that - it is pertinent to note that imposition of penalty is related to the sustainability of the demand and therefore is not unlinked to the impugned demand. Further, under the then Section 84(4) ibid, it was clearly mentioned that no order under Section 84 shall be passed by CCE in respect of any issue, an appeal against such issue is pending before the CCE (Appeals) . It is seen that the appellant s appeal was against Order-in-Original, dated 6-12-2007, in terms of which service tax demand of ₹ 7,15,923/- along with interest and penalties was confirmed and therefore it is obvious that the issue of penalty was very much a subject matter of the appeal pending before Commissioner (Appeals). As it is evident that the Order-in-Revision passed by the Commissioner was in violation of Section 84 ibid and therefore cannot be held to be sustainable. Accordingly, we set aside the impugned Order-in-Revision. - Decided in favour of appellant

Summary

Issues:
1. Restoration of appeal dismissed for non-prosecution.
2. Validity of Order-in-Revision passed under Section 84 of the Finance Act, 1994.

Issue 1: Restoration of appeal dismissed for non-prosecution
The appellant filed a Miscellaneous Application seeking restoration of the appeal which was summarily dismissed due to non-prosecution. The appellant claimed they had informed the CESTAT Registry about their inability to attend the hearing due to personal reasons, but this communication was not considered, leading to the dismissal. Citing a Supreme Court judgment, it was argued that even in cases of non-appearance, the appeal should be decided on merits. With the consent of both parties, the CESTAT order dismissing the appeal was recalled, and the appeal was reinstated for further consideration.

Issue 2: Validity of Order-in-Revision under Section 84 of the Finance Act, 1994
The appellant contended that the Order-in-Revision, passed under Section 84 of the Finance Act, 1994, on 24-4-2009, was inappropriate as the matter was pending before the Commissioner (Appeals) on the same date. It was highlighted that a previous appeal before the CESTAT had set aside the Order-in-Appeal and remanded the matter to the Commissioner (Appeals) for a decision on merits. The Departmental Representative argued that the revision was only related to the imposition of penalties, which was not under consideration during the earlier proceedings. However, the Tribunal noted that the imposition of penalties was directly linked to the sustainability of the demand and, as per Section 84(4) of the Act, no order should be passed while an appeal on the issue is pending. Since the issue of penalties was part of the pending appeal before the Commissioner (Appeals), the Order-in-Revision was deemed to be in violation of the law. Consequently, the Tribunal set aside the Order-in-Revision and allowed the appeal in favor of the appellant.