2014 (9) TMI 381 - AT - Service Tax

Whether adjudicating authority be directed to keep the matter pending till the Apex Court decides the appeal filed before it - no stay of operation of the order granted by the Apex Court - decision of larger bench - Held that - it is fair to allow ld. adjudicating authority to exercise his power judiciously in accordance with law without encroaching over his powers. - It may be stated that Tribunal as a creature of statute has no power to bring a statutory proceeding to halt by its whim and statutory authorities should be allowed to act in their jurisdiction in accordance with law. - matter remanded to the Commissioner for a fresh adjudication after taking into account all the evidence produced by the appellant and to pass appropriate order accordingly.

Issues Involved:
1. Whether the Commissioner should have kept the proceedings in abeyance until the Supreme Court's decision.
2. Whether the contracts were divisible and if the appellants could avail abatement and Cenvat credit.
3. Whether the appellant maintained separate accounts for different services and input credits.
4. Whether the adjudicating authority complied with the Tribunal's remand order.

Issue-Wise Detailed Analysis:

1. Whether the Commissioner should have kept the proceedings in abeyance until the Supreme Court's decision:
The appellants argued that the Commissioner should have waited for the Supreme Court's decision before proceeding with the de novo adjudication. The Tribunal noted that the Supreme Court had admitted the appeal but did not stay the Tribunal's remand order. The Tribunal agreed with the appellants that to avoid multiplicity of proceedings, the Commissioner should have waited for the Supreme Court's decision. However, Member (Technical) disagreed, stating that the Tribunal should ensure the proper implementation of its order and not halt proceedings, as the Supreme Court did not stay the order. The third Member, D.N. Panda, resolved the difference by stating that statutory authorities should act within their jurisdiction and proceed with adjudication, giving the appellant a fair opportunity to present evidence.

2. Whether the contracts were divisible and if the appellants could avail abatement and Cenvat credit:
The appellant provided services under different categories: Commercial or Industrial Construction Service, Erection, Commissioning or Installation Service, and Consulting Engineers Service. The dispute centered on whether these services were divisible and if abatement and Cenvat credit could be availed. The Tribunal noted that the adjudicating authority did not examine this issue properly in the first adjudication or de novo proceedings. The Tribunal had previously remanded the matter to ascertain facts about the divisibility of contracts and the eligibility for abatement and Cenvat credit.

3. Whether the appellant maintained separate accounts for different services and input credits:
The Tribunal's earlier orders sought to verify if the appellant maintained distinct records for different contracts and input credits. The Tribunal required the adjudicating authority to examine whether separate accounts were maintained to allocate input credits to respective services. This issue was crucial to determine if the appellant could claim abatement and Cenvat credit appropriately. The adjudicating authority's failure to address this issue led to the remand for a fresh adjudication.

4. Whether the adjudicating authority complied with the Tribunal's remand order:
The Tribunal found that the adjudicating authority did not comply with its remand order, which required a detailed examination of the appellant's submissions and records. The adjudicating authority ignored the Tribunal's directions and did not provide the appellant with a reasonable opportunity for a hearing. The Tribunal emphasized the need for a speaking order addressing all issues raised by the appellant.

Separate Judgments Delivered:
Member (Judicial) and Member (Technical) agreed on remanding the matter for fresh adjudication but differed on whether to keep the matter pending until the Supreme Court's decision. The third Member, D.N. Panda, resolved the difference, allowing the adjudicating authority to proceed with the case, ensuring a fair opportunity for the appellant to present evidence.

Final Order:
The majority order set aside the impugned order and remanded the matter to the Commissioner for fresh adjudication, taking into account all evidence produced by the appellant and passing an appropriate order accordingly.

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