2010 (12) TMI 405 - AT - Service Tax

Demands of service tax - Assessee pleaded that the allegation against them that they had not paid the service tax by due date or had short paid the service tax is incorrect, as there was no short payment and the service tax had been paid by the due date, that in spite of service tax having been paid by them by the due date, show cause notices were issued alleging short payment/non-payment and service tax demand confirmed against them - the Commissioner (Appeals) on one hand has set aside the service tax demands accepting the respondent s plea that service tax which have been demanded had already been paid by them by the due date, but on the other hand, he has directed the adjudicating authority to verify the original duty paying documents while before setting aside the service tax demands the necessary verification about genuineness of the tax paying documents should have been done. The orders of setting aside the documents without verification and directing original adjudicating authority to do the verification are not correct and have to be set aside. Cenvat credit - section 85 of the Finance Act, 1994 read with section 35A of the Central Excise Act, 1944 - The Commissioner (Appeals)has directed the original adjudicating authority to verify the relevant documents and come to a reasoned conclusion regarding the admissibility or otherwise on the cenvat credit., the Hon ble Supreme Court in the case of MIL India Ltd. (supra) and Hon ble Punjab & Haryana in the case of CCE v. B.C. Kataria (2007 -TMI - 3281 - HIGH COURT OF PUNJAB & HARYANA) has held that after amendment of section 35A of the Central Excise Act, 1994 with effect from 11-5-2001, the Commissioner (Appeals) has no powers to remand any matter - Therefore, the Commissioner (Appeals) does not have the powers to remand the matter and for deciding an appeal filed before him, if necessary, he has to call for the records and give his findings.

Summary

Issues:
- Appeal against orders-in-appeals passed by the Commissioner (Appeals)
- Commissioner (Appeals) setting aside the impugned orders and allowing the appeals of the Respondents by way of remand
- Commissioner (Appeals) directing the original adjudicating authority to verify original duty paying documents
- Commissioner (Appeals) remanding the matter to the original adjudicating authority regarding Cenvat credit
- Commissioner (Appeals) not having powers to remand the matter

Analysis:
The appeals were filed by the revenue against the orders-in-appeals passed by the Commissioner (Appeals) on the ground that the Commissioner (Appeals) had set aside the impugned orders and allowed the appeals of the Respondents by way of remand. The revenue contended that the Commissioner (Appeals) did not have the power to remand the matter, citing a judgment of the Hon'ble Supreme Court. The revenue argued that the Commissioner (Appeals) should have given a finding after examining the necessary records instead of remanding the matter.

During the hearing, the revenue representative argued that the Commissioner (Appeals) had set aside the service tax demands without verifying the original duty paying documents, which was not appropriate. The representatives of the Respondents, on the other hand, claimed that the allegations of non-payment or short payment of service tax were incorrect as they had paid the service tax by the due date. They agreed that the Commissioner (Appeals) should give findings on the allegations after verifying the original duty paying documents.

The Tribunal considered the submissions from both sides and found that the Commissioner (Appeals) had set aside the service tax demands without verifying the original duty paying documents, which was deemed incorrect. Similarly, regarding the Cenvat credit, the Commissioner (Appeals) had directed the original adjudicating authority to verify the relevant documents, which was not in line with the law. The Tribunal referred to judgments by the Hon'ble Supreme Court and the Hon'ble Punjab & Haryana High Court, stating that the Commissioner (Appeals) did not have the power to remand any matter.

Consequently, the Tribunal set aside the impugned orders and directed the Commissioner (Appeals) to give clear findings after examining the records regarding the payment of service tax and the availability of Cenvat credit. The revenue's appeals were disposed of accordingly.