2016 (4) TMI 1218 - AT - Service Tax

Jurisdiction - power to review - Held that - the notice proposing revision was issued on 27th April, 2011, well after the amendment that substituted the erstwhile Section 84 - Held that - The revision powers were sought to be invoked under a non-existent provision and hence the review undertaken by the Committee of Chief Commissioners is without jurisdiction - appeal rejected - decided against Revenue.

Summary

Issues:
1. Interpretation of tax liability on online information and database access services.
2. Validity of revision orders under Section 84 of Finance Act, 1994.
3. Jurisdiction of the Committee of Chief Commissioners to review orders.

Analysis:

Issue 1: Interpretation of Tax Liability
The dispute arose from a demand issued to a company for downloading images, journals, and photographs from a website, deemed as 'online information and database access service' by tax authorities. The lower officer considered it taxable as an 'intellectual property service,' excluding copyright for taxation purposes. The revision authority upheld this view, emphasizing that the subscription agreement enforced restrictions on the downloaded content's use, not the copyright itself. The Revenue argued that the focus should be on the right to use the images, which were commercially exploited, rather than the copyright.

Issue 2: Validity of Revision Orders
The Tribunal referred to a case where it was held that post the amendment to Section 86 of the Finance Act, 1994, revision orders under Section 84 were no longer subject to review by the Committee of Chief Commissioners. The Revenue contended that since the order sought to be revised was issued before the amendment, it was within the time limit prescribed by the erstwhile Section 84, allowing the Committee to review and direct an appeal under Section 86. However, the Tribunal found that the revision powers were invoked under a non-existent provision due to the amendment, rendering the review by the Committee without jurisdiction.

Issue 3: Jurisdiction of Committee of Chief Commissioners
The Tribunal cited a case to establish that the right of appeal against revisionary orders is governed by the law prevailing at the time of the institution of revisionary proceedings, not the decision date. In this case, the notice proposing revision was issued after the amendment, making the invocation of revision powers under the old provision invalid. Consequently, the review by the Committee of Chief Commissioners lacked jurisdiction, leading to the rejection of the appeal.

In conclusion, the Tribunal rejected the appeal due to the invalidity of the revision orders under the amended provision, emphasizing the importance of adherence to the prevailing legal framework for invoking revisionary powers and subsequent appeals.