2007 (11) TMI 261 - AT - Service Tax

Appeal by department - Authorization to file an appeal has to be issued by two Commissioners not by single commissioner - Therefore the authorization order and the appeal filed by the Commissioner before the Commissioner (Appeals) is not correct - orders passed by both the authorities are not correct in law - Authorization Order signed by the Commissioner to file the appeal is not correct present appeals are not maintainable appeal dismissed

Summary

Issues:
1. Maintainability of the appeal before the Commissioner (Appeals) regarding the levy of Service Tax.
2. Correctness of the authorization order signed by a Single Commissioner for filing the appeal.

Issue 1: Maintainability of the appeal before the Commissioner (Appeals) regarding the levy of Service Tax:

The appeal arose from the Order-in-Appeal confirming the Order-in-Original passed in favor of the assessee. The Revenue challenged the dropping of proceedings under a show cause notice, arguing that the matter should have been disposed of under the Finance Act for the levy of Service Tax. The Commissioner (Appeals) examined the issue and ruled in favor of the assessee. It was found that no Service Tax was leviable on payments made to a foreign firm for the transfer of know-how. Additionally, charges for assembling, installation, testing, and commissioning of machines were not covered under "Consulting Engineer Services." The circular clarifying this was held to be applicable retrospectively. The Commissioner (Appeals) upheld the Order-in-Original, concluding that the demand for Service Tax was not sustainable.

Issue 2: Correctness of the authorization order signed by a Single Commissioner for filing the appeal:

The learned Counsel argued that the Authorization Order for filing the appeal was incorrect as it should have been issued by two Commissioners, citing various judgments. It was contended that the appeal should have been filed before the Commissioner of Central Excise, Hyderabad, for revision of the Order-in-Original. The Tribunal found that the Authorisation Order signed by a Single Commissioner was not maintainable, as it should have been signed by a Committee of two Commissioners. Relying on previous judgments, the Tribunal concluded that the appeal was not maintainable before the Commissioner (Appeals). The issue was also decided in favor of the assessee on merit. Therefore, the Revenue's appeal was rejected.

In conclusion, the Tribunal upheld the Commissioner (Appeals)'s decision in favor of the assessee, ruling that the demand for Service Tax was not sustainable. Additionally, the appeal filed by the Revenue was found to be not maintainable due to the incorrect authorization order signed by a Single Commissioner. The judgments cited supported the position that such an appeal should have been filed before the Commissioner of Central Excise for revision.