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2013 (7) TMI 240 - AT - Service TaxJurisdiction of Commissioner - whether the Commissioner of Service Tax, Mumbai has jurisdiction to issue show-cause notice - CBEC needs to appoint Central Excise Officer to exercise powers within the territorial jurisdiction appellant contended that the CST, Mumbai is not a Central Excise Officer for the purpose of Chapter V and Chief CCE, Mumbai cannot delegate the powers of adjudication for determination of Service Tax and interest liability Held that - As per section 2(b) of the Central Excise Act CCE(Appeals) is also Central Excise Officer - no need to appoint CST, Mumbai as a Central Excise Officer all over again relying on Raghunath International Ltd. Vs. UOL (2012 (11) TMI 951 - ALLAHABAD HIGH COURT) - Once the power is exercised in accordance with law, there cannot be any challenge to the same. Power to determine service tax liability - Power u/s 83A - power delegated to the Chief Commissioner covers not only the power under Section 83A but also powers under Rule 3 which provides for levy and collection of Service Tax - purpose and object of Section 83A is to provide powers of adjudication in service tax cases - power of determination of service tax and interest liability in addition to the power of imposition of penalty - the said section cannot be interpreted in a narrow sense to restrict the power to imposition of penalty alone- section 83A does not read as only penalty or solely penalty as decided in UOI vs. Tata Iron & Steel Co. Ltd.(1975 (12) TMI 79 - SUPREME COURT OF INDIA). The next issue for consideration is whether the Chief CCE has the power to assign adjudication of specific cases to any other officer within his jurisdiction - The CBE&C vide the Notification No. 6/2009-ST dated 30.1.2009 issued under Section 37A of the Central Excise Act, as made applicable to service tax by Section 83 of the Finance Act, 1994, read with the provisions of Section 83A and Notification No. 16/07-ST dated 19.4.2007 has delegated the power of assigning adjudication of cases to the Chief Commissioner of Central Excise within his jurisdiction thus the Chief CCE can assign adjudication of service tax cases to any CEO within his jurisdiction.
Issues Involved:
1. Jurisdiction of the Commissioner of Service Tax, Mumbai to issue show-cause notices under Section 73 of the Finance Act, 1994. 2. Powers of the Chief Commissioner of Central Excise, Mumbai under Section 83A of the Finance Act, 1994 to delegate adjudication to other Commissioners within his jurisdiction. Detailed Analysis: 1. Jurisdiction of the Commissioner of Service Tax, Mumbai: The primary issue is whether the Commissioner of Service Tax, Mumbai has the jurisdiction to issue show-cause notices to the assesses/applicants under Section 73 of the Finance Act, 1994. The appellants argued that the term 'Central Excise Officer' as defined under the Central Excise Act, 1944 should apply to the Finance Act, 1994. They contended that no notification or appointment order had been issued by the CBEC appointing the Commissioner of Service Tax, Mumbai as the Central Excise Officer under Rule 3 of the Service Tax Rules, 1994. Therefore, the show-cause notices issued by the Commissioner of Service Tax, Mumbai were void ab initio. The Tribunal examined Rule 3 of the Service Tax Rules, 1994, which states that the CBEC may appoint such Central Excise Officers for exercising powers under Chapter V of the Finance Act within specified local limits. The Tribunal noted that the CBEC had issued Order No. 4/2/2004-Service Tax dated 18.5.2004, which created six exclusive Service Tax Commissionerates and empowered the Commissioner and other officers subordinate to him as proper officers under Rule 3 of the Service Tax Rules, 1994. The Tribunal concluded that the Commissioner of Service Tax, Mumbai, and officers subordinate to him are 'Central Excise Officers' duly empowered to assess and collect service tax within their jurisdiction. The Tribunal rejected the appellants' argument that a separate notification was required to appoint the Commissioner of Service Tax, Mumbai as a Central Excise Officer. 2. Powers of the Chief Commissioner of Central Excise, Mumbai: The second issue is whether the Chief Commissioner of Central Excise, Mumbai has the authority under Section 83A of the Finance Act, 1994 to delegate adjudication to other Commissioners within his jurisdiction. The appellants argued that Section 83A only provides for adjudication of penalties and not for the determination of service tax liability and interest. The Tribunal examined Section 83A, which states that any person liable to a penalty may be adjudged by a Central Excise Officer conferred with such power by the CBEC. The Tribunal noted that the determination of penalty under Sections 76, 77, and 78 of the Finance Act, 1994 is directly dependent on the quantum of service tax defaulted or evaded. Therefore, the determination of penalty is integrally connected with the determination of service tax liability. The Tribunal also referred to Notification No. 16/2007-ST dated 19.4.2007 and Notification No. 6/2009-ST dated 30.1.2009, which delegated the power of assigning adjudication of cases to the Chief Commissioner of Central Excise within his jurisdiction. The Tribunal concluded that the Chief Commissioner of Central Excise, Mumbai has the authority to assign adjudication of service tax cases to any Central Excise Officer within his jurisdiction, and this includes the determination of service tax liability and interest. Conclusion: The Tribunal dismissed the miscellaneous applications, holding that: 1. The Commissioner of Service Tax, Mumbai, and officers subordinate to him are 'Central Excise Officers' duly empowered to assess and collect service tax within their jurisdiction. 2. The Chief Commissioner of Central Excise can assign adjudication of service tax cases to any Central Excise Officer within his jurisdiction. 3. Section 83A of the Finance Act, 1994 envisages adjudication of not only penalty but also determination of service tax liability and interest thereon. Pronouncement: The judgment was pronounced in the Court on 21/02/2013.
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