2014 (4) TMI 406 - HC - Service Tax

Jurisdiction of Commissioner (Appeals) - Power to remand - whether the Commissioner (Appeals) exercising powers under section 85 of the Finance Act, 1994 has the power to remand the proceedings back to the adjudicating authority - Held that - by virtue of sub-section (5) of section 85, the same limitation on the Commissioner (Appeals) to remand a proceedings contained in section 35A(3) of the Central Excise Act, 1944 must not apply in the appeals under section 85 of the Finance Act, 1944 also. This is so because, sub-section (5) of section 85 though requires the Commissioner (Appeals) to follow the same procedure and exercise same powers in making orders under section 85, as he does in the Central Excise Act, 1944 in appeals, this sub-section itself starts with the expression subject to the provisions of this Chapter . Sub-section (4) of section 85 itself contains the width of the power of the Commissioner (Appeals) in hearing the proceedings of appeal under section 85. The scope of such powers flowing from sub-section 85(4) therefore cannot be curtailed by any reference to sub-section (5) of section 85 of the Finance Act, 1994 - Decided against Revenue.

Summary

Issues:
1. Interpretation of the powers of the Commissioner (Appeals) under section 85 of the Finance Act, 1994.
2. Comparison between section 85 of the Finance Act, 1994 and section 35A(3) of the Central Excise Act, 1944 regarding the power of remand by the Commissioner (Appeals).

Analysis:

1. The primary issue in this judgment revolves around the interpretation of the powers vested in the Commissioner (Appeals) under section 85 of the Finance Act, 1994. The question raised was whether the Commissioner (Appeals) has the authority to remand a case back to the adjudicating authority for fresh consideration in service tax matters. The Tribunal, relying on a decision of the Delhi High Court, held that under section 85(4) of the Finance Act, 1994, the Commissioner (Appeals) indeed possesses the power to remand a case for denovo adjudication. The Court analyzed the relevant provisions of section 85, emphasizing that the wide wording of sub-section (4) grants the Commissioner (Appeals) ample powers to pass orders enhancing service tax, interest, or penalty, which inherently includes the power to remand a proceeding for proper reasons to the adjudicating authority.

2. The second issue delves into the comparison between section 85 of the Finance Act, 1994 and section 35A(3) of the Central Excise Act, 1944 regarding the power of remand by the Commissioner (Appeals). The Revenue contended that the amendment to section 35A(3) of the Central Excise Act, 1944, post-11.5.2001, implied a conscious omission by the Legislature to grant the power of remand to the Commissioner (Appeals). However, the Court referred to previous judgments, including one by the Supreme Court, which upheld the Commissioner's power of remand even after the amendment. The Court distinguished the provisions of section 85 of the Finance Act, 1994 from section 35A(3) of the Central Excise Act, 1944, emphasizing that the powers of the Commissioner (Appeals) under section 85(4) are not limited by the provisions of section 35A(3) due to the specific wording and scope of the relevant sections.

In conclusion, the Court dismissed the appeal, affirming the view that the Commissioner (Appeals) does possess the power to remand proceedings under section 85 of the Finance Act, 1994, and that the limitations imposed by the amendment to section 35A(3) of the Central Excise Act, 1944 do not apply to the powers granted under section 85.