2016 (6) TMI 416 - HC - Service Tax

Imposition of Cost on adjudicating authority - Payable to Prime Minister s National Relief Fund - Held that - the Tribunal had recorded that the analysis of the adjudicating authority was nothing but verbatim reproduction of the submission of the appellant and no finding was recorded about the taxability of services and the analysis/discussions/findings of the adjudication are very shoddy. It had been highly and conspicuously nonspeaking, non-reasoned, arbitrary and cavalier while passing the order. The adjudicating authority had passed the order without application of mind and such orders adversely and severely impinge upon the public trust in the public authorities. It was further recorded that a public authority in such circumstances while performing quasi-judicial function deserves to be put to costs. Accordingly, the Tribunal imposed the cost of ₹ 25,000/- on the adjudicating authority who passed the order in question. No illegality or perversity could be pointed out in the aforesaid findings recorded by the Tribunal which may warrant interference by this Court. - Decided against the Revenue

Summary

Issues:
Delay in refiling the appeal, Substantial questions of law regarding the power of CESTAT to impose cost on the adjudicating authority and the propriety of directing the deposit of cost into the PM National Relief Fund.

Analysis:
1. Delay in Refiling the Appeal:
The judgment begins by condoning a delay of 59 days in refiling the appeal. This issue is addressed at the outset to clear procedural matters before delving into the substantive issues raised in the appeal.

2. Substantial Questions of Law:
The appeal was filed under Section 35G of the Central Excise Act, 1944, and Section 83 of the Finance Act, 1994, challenging the order of the Customs Excise and Service Tax Appellate Tribunal (CESTAT). The substantial questions of law raised in the appeal were twofold. Firstly, whether CESTAT has the authority to impose costs on the adjudicating authority. Secondly, whether directing the deposit of costs into the PM National Relief Fund is appropriate when it is not voluntary.

3. Factual Background and Tribunal's Findings:
The respondent was issued three show cause notices for different periods demanding significant amounts of service tax. The adjudicating authority confirmed these demands along with interest and penalties. The Tribunal, in its order, criticized the adjudicating authority for a lack of proper analysis and reasoning in its decision-making process. The Tribunal found the adjudication to be non-reasoned, arbitrary, and cavalier, adversely affecting public trust in authorities. Consequently, the Tribunal imposed a cost of ?25,000 on the adjudicating authority, payable to the Prime Minister's National Relief Fund.

4. Court's Decision:
Upon hearing the arguments presented, the Court upheld the Tribunal's findings and decision. It noted that the Tribunal's observations regarding the adjudicating authority's conduct were valid and warranted the imposition of costs. The Court found no illegality or perversity in the Tribunal's decision, leading to the dismissal of the appeal. It was concluded that no substantial question of law arose from the case, and hence, the appeal was dismissed.

In summary, the judgment addressed the delay in refiling the appeal, analyzed the substantial questions of law regarding the authority of CESTAT to impose costs and the propriety of directing the deposit of costs, detailed the factual background leading to the Tribunal's decision, and ultimately upheld the Tribunal's findings, dismissing the appeal.