2014 (5) TMI 263 - HC - Service Tax

Rejection of refund claim - Appellate remedy to file an appeal before tribunal - Jurisdiction of tribunal - Refund of service tax under mistake of law - rending of immovable property - period of limitation - Held that - amendment to Section 83 by making a specific reference to Section 35EE of the Central Excise Act, did not make any difference to the nature of jurisdiction exercisable by the CESTAT under Section 86; it continued to possess jurisdiction to decide on matters pertaining to rebate and refund. For this reason, the question of law is answered in favour of the assessee/appellant and against the revenue. Since CESTAT did not decide the matter on merits, its decision holding that it lacked jurisdiction- is set aside. The view taken by the Registry of the CESTAT is plainly erroneous; the CESTAT is directed to hear and decide the appeal preferred before it by the present petitioner on its merits after hearing the parties in accordance with law. - Decided in favor of assessee.

Summary

Issues:
1. Quashing of a letter directing the return of an appeal before the Customs, Excise and Service Tax Appellate Tribunal.
2. Hearing and decision of an appeal against an order issued by the Commissioner of Appeals by CESTAT on merits.
3. Refund claim of service tax and cess for the period 2005-06 to 2009-2010.
4. Rejection of the refund claim based on Section 11B of the Central Excise Act.
5. Jurisdiction of CESTAT to decide on matters pertaining to rebate and refund.
6. Interpretation of Section 83 of the Finance Act, 1994, and its impact on appellate remedies.

Analysis:
1. The petitioner sought directions to quash a letter directing the return of its appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and requested that the appeal against the order issued by the Commissioner of Appeals should be heard and decided by CESTAT on merits. The High Court found the Registry of CESTAT's decision to be erroneous and directed CESTAT to hear and decide the appeal on its merits after hearing the parties in accordance with the law.

2. The appellant, a registered dealer, applied for a refund of service tax and cess for the period 2005-06 to 2009-2010, alleging that the service tax paid on exported services was not liable to tax. Both the order-in-original and the order in appeal rejected the refund claim based on Section 11B of the Central Excise Act. The High Court held that the claim could not be denied since the activity was not subjected to service tax, and directed CESTAT to decide the appeal on its merits.

3. The Revenue contended that the appellate remedy was barred, and the petitioner could only approach the revisional authority under Section 35EE of the Central Excise Act. However, the High Court, citing a previous ruling, held that the amendment to Section 83 in 2012 did not limit the appellate power, and CESTAT continued to possess jurisdiction to decide on rebate and refund matters. The High Court ruled in favor of the petitioner, setting aside CESTAT's decision that it lacked jurisdiction.

4. The High Court emphasized that exclusion of jurisdiction of courts and tribunals should be through express provisions or necessary intendment. It highlighted the importance of appellate remedies in refund and rebate claims and clarified that the amendment to Section 83 did not affect CESTAT's jurisdiction under Section 86. The Court directed CESTAT to decide the appeal on its merits, allowing the appeal without any order as to costs.

5. In conclusion, the High Court allowed the writ petition, directing CESTAT to hear and decide the appeal on its merits in accordance with the law. The judgment clarified the jurisdiction of CESTAT in matters related to rebate and refund claims, emphasizing the importance of appellate remedies and rejecting the Revenue's contentions regarding the limitation of appellate powers under the amended Section 83 of the Finance Act, 1994.