2014 (1) TMI 509 - HC - Service Tax

Appeal u/s 86(1)(1A)(i) - Jurisdiction of Commissioner -Held that - Board empowerd to constitute the Committee in the name of post and holding such post or who may subsequently be appointed on such post automatically becomes the Member of such Committee and it is not the appointment as persona disgrata. If the interpretation of the rule is made according to the view expressed by the learned counsel for the respondent, then it will be putting restriction on the specific statutory provision of the Act and Rules and under the Act, nowhere it is provided that such power, can be vested in a person and cannot be vested upon a post. Contrary to the above, in fact, the provision specifically provides for vesting of power upon a person by virtue of holding of the post of Chief Commissioner or Commissioner. Therefore, there was no need for publication of the notification by the Board in the name of the persons who were holding the post of Chief Commissioners. In the notification dated 12th May, 2007, the Member of the Committee are two Chief Commissioners of the specific areas and Membership is by virtue of holding the post of Chief Commissioner of that area and members are not the persons who held the post on 12th May, 2007 alone. The inclusion of the two posts as members in the Committee under Section 86(1)(1A)(i) of the Finance Act, 1994 is in perpetual succession of the Officers holding the post of the Chief Commissioner of that particular area and therefore, immediately on the day on which the Officers demited the posts of the Chief Commissioner of Customs and Central Excise, Ranchi and Bhubaneswar, the other Officers, who have duly been appointed and posted on that posts, automatically become the Member of the Committee by virtue of their being Chief Commissioner. Therefore, from the date when these two Officers, who were duly appointed on the post of Chief Commissioner and were posted on the post for the area of Ranchi and Bhubaneswar, automatically became the Member of the Committee and were competent to take decisions - Since the appeal has not been decided by the Tribunal on merit, the appeal is remanded to the Tribunal for deciding it on its merit - Decided in favour of Revenue.

Issues Involved:
1. Validity of the constitution of the Committee under Section 86(1)(1A)(i) of the Finance Act, 1994.
2. Requirement of notification publication in the Official Gazette for the appointment of Chief Commissioners.
3. Tribunal's jurisdiction to question the validity of the Committee's constitution.
4. Interpretation of statutory provisions and rules.

Issue-wise Detailed Analysis:

1. Validity of the Constitution of the Committee:
The Revenue challenged the dismissal of their appeal by the Customs, Excise, and Service Tax Appellate Tribunal. The Tribunal dismissed the appeal on the grounds that no notification published in the Official Gazette appointed the Chief Commissioners of Central Excise for Ranchi and Bhubaneswar Zones. The Tribunal cited the absence of such a notification, following a precedent in the case of M/s. Nafar Chandra Jute Mills, and held that the direction to file the appeal was issued without the necessary statutory power and jurisdiction, rendering it non est in the eyes of law.

2. Requirement of Notification Publication in the Official Gazette:
The appellant argued that the Committee was constituted by a Gazette notification dated 12th May 2007, which appointed the Chief Commissioners of Central Excise, Ranchi, and Bhubaneswar as members for the areas of Jamshedpur, Patna, and Ranchi. The Tribunal's dismissal was based on the absence of Gazette notifications for the specific individuals holding these posts. The appellant contended that Rule 3(1) of the Central Excise Rules, 2002, gives discretion to the Board regarding the publication of notifications, implying it is not mandatory for every notification to be published in the Official Gazette.

3. Tribunal's Jurisdiction to Question the Validity of the Committee's Constitution:
The appellant asserted that the Tribunal should not have questioned the validity of the Committee's constitution, as this could be challenged separately before higher courts. The Supreme Court's judgment in L. Chandra Kumar v. Union of India was cited, emphasizing that clear statutory provisions should be read as they are without adding interpretations.

4. Interpretation of Statutory Provisions and Rules:
The appellant highlighted that Section 86(1)(1A)(i) of the Finance Act, 1994, empowers the Board to constitute Committees, and the notification constituting such a Committee had been published in the Official Gazette. The respondent argued that Rule 3 of the Central Excise Rules, 2002, requires that the power of the Central Excise Officer be confirmed by another notification published in the Official Gazette.

The court clarified that Section 86(1)(1A)(i) and (ii) allows the Board to constitute Committees by post, not by individual names, and holding the post of Chief Commissioner automatically makes one a member of the Committee. The requirement for publication of the notification in the name of the individuals holding the post was deemed unnecessary.

Conclusion:
The court found that the Tribunal erred in its interpretation and application of the law. The notification dated 12th May 2007, which constituted the Committee, was valid, and the Chief Commissioners holding the posts were automatically members of the Committee. The Tribunal's order dismissing the Revenue's appeal was set aside, and the case was remanded to the Tribunal for a decision on its merits.

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