2012 (8) TMI 436 - AT - Service Tax

Non-registration with the Service Tax Department and failure to pay service tax - Held that - As Commissioner (Appeals) set aside the order passed by the adjudicating authority confirming the demand & penalty and remanded the matter for denovo adjudication is not correct as that by an amendment to Section 35A of Central Excise Act, 1944 w.e.f. 11.5.2011, the power of remand has been specifically withdrawn by the legislature - the embargo on the power of remand in Section 35A is squarely applicable to the provisions of Section 85 of the Finance Act, 1994.

Summary

Issues:
Jurisdiction of Commissioner (Appeals) to remand the case for denovo adjudication.

Analysis:

The appeal before the Appellate Tribunal concerned the jurisdiction of the Commissioner (Appeals) to remand a case for denovo adjudication. The respondents, engaged in Consulting Engineering services, were alleged to have violated provisions of the Finance Act, 1994 by not registering with the Service Tax Department and failing to pay service tax for the years 2000-2001 and 2001-2002. A demand notice was issued for recovery of service tax, confirmed by the adjudicating authority with a penalty. The Commissioner (Appeals) set aside the order and remanded the matter for fresh adjudication, leading to the Revenue's appeal.

The Revenue contended that the Commissioner (Appeals) lacked the authority to remand the case, citing judgments from the Hon'ble Supreme Court and Tribunal. The Tribunal analyzed the amendment to Section 35A of the Central Excise Act, 1944, which withdrew the power of remand. Referring to the MIL India case and the provisions of the Finance Act, 1994, the Tribunal concluded that the Commissioner (Appeals) did not possess the power to remand the case. However, recognizing the need for further examination of the issues by the adjudicating authority, the Tribunal remanded the case for fresh adjudication, emphasizing the grant of a fair hearing to the respondent.

In summary, the Tribunal allowed the Revenue's appeal by way of remand, highlighting the limitations on the Commissioner (Appeals)'s power to remand cases under the Finance Act, 1994 and the corresponding provisions of the Central Excise Act, 1944. The decision underscored the importance of due process and comprehensive consideration of all aspects of the case by the adjudicating authority in such situations.