2016 (9) TMI 1103 - AT - Service Tax

Power and jurisdiction of Commissioner - Commissioner directed the Assistant Commissioner to file an appeal before the Commissioner (Appeals) against the order of original adjudicating authority prior to 19.08.2009 - Held that - Sections 84 clearly reveals that prior to 19.08.2009, it was the Commissioner himself who was having the power and jurisdiction to call for the records of proceedings before the adjudicating authority and was empowered to pass an order in respect of the same as he may deem fit. However, w.e.f. 19.08.2009 the provisions were changed and the Commissioner was empowered to examine the order of the adjudicating authority and if he was not satisfied, to direct the said authority to file an appeal before the Commissioner (Appeals). The impugned order of the Assistant Commissioner, in the present proceedings, was passed on 28.01.2009 and the order in review by the Commissioner directing the Assistant Commissioner to file an appeal was passed on 05.03.2009 i.e. well before 19.08.2009. As such, it can be safely held that, during the relevant period, there were no powers or jurisdiction with the Commissioner to direct the Assistant Commissioner to challenge the order passed by him before the Commissioner (Appeals). As such, the appeal filed by the Assistant Commissioner before the Commissioner (Appeals) in terms of the order-in-review dated 05.03.2009 is without jurisdiction and against the clear law laid down in the Act. Consequently, the order-in-original passed by the Commissioner (Appeals) is bad in law, being beyond jurisdiction. Refund claim - service tax paid on various service utilized for export of the goods - Notification No. 41/2007-ST dated 6.10.2007 - Held that - we note that certain provisions of Central Excise Act, 1944 have been adopted for the disputes relating to service tax in terms of the provisions of Section 83 of the Finance Act, 1994. On going through the Section 83 of the Finance Act, 1994, we note that while adopting certain provisions of Central Excise Act, 1944, which stand mentioned in the said Section itself, Section 35-E does not stand adopted. In this view also, we find that the order directing the lower authority to file an appeal before the Commissioner (Appeals) is beyond the scope of Section 83 of the Finance Act, 1994 itself. Therefore, by following the various decisions, the impugned order of commissioner (Appeals) is without jurisdiction and the same is accordingly set aside. - Decided in favour of appellant

Summary

Issues:
Refund of service tax paid on services utilized for export, Commissioner's power to direct filing of appeal before Commissioner (Appeals), Jurisdictional validity of Commissioner's order, Applicability of Section 83 of the Finance Act, 1994, Pre-19.08.2009 vs. post-19.08.2009 powers of the Commissioner.

Refund of Service Tax and Commissioner's Power:
The appellants, exporters, claimed a refund of service tax paid on services used for export under notification No. 41/2007-ST. The original adjudicating authority granted the refunds in two separate orders. However, the Commissioner reviewed these orders and directed the Assistant Commissioner to file an appeal before the Commissioner (Appeals). The appellants challenged this direction, arguing that the Commissioner lacked the power to issue such a directive during the relevant period. The Commissioner's authority to call for records and pass orders was scrutinized under Section 84 of the Finance Act, 1994, which was replaced on 19.08.2009. The Tribunal found that prior to this amendment, the Commissioner had the sole authority to review orders and lacked the power to direct subordinates to file appeals before the Commissioner (Appeals). As the Commissioner's directive predated the amendment, it was deemed without jurisdiction, rendering the subsequent appeal and order-in-appeal invalid.

Applicability of Section 83 of the Finance Act, 1994:
The Tribunal noted that although the dispute concerned service tax refunds falling under the Finance Act, 1994, certain provisions of the Central Excise Act, 1944 were adopted for service tax disputes under Section 83 of the Finance Act, 1994. However, Section 35-E of the Central Excise Act, 1944 was not included in the provisions adopted. Consequently, the order directing the filing of an appeal before the Commissioner (Appeals) was deemed beyond the scope of Section 83 of the Finance Act, 1994.

Pre-19.08.2009 vs. Post-19.08.2009 Commissioner's Powers:
The Tribunal referenced past decisions where it was established that before 19.08.2009, the Commissioner could issue orders independently without the authority to direct subordinates to file appeals before the Commissioner (Appeals). Such directives were considered unlawful, leading to the setting aside of orders-in-appeal based on such review orders. Aligning with these precedents and the analysis conducted, the Tribunal concluded that the Commissioner (Appeals) order lacked jurisdiction and was subsequently set aside, granting relief to the assessee.

This judgment emphasizes the importance of jurisdictional validity in administrative decisions, highlighting the evolution of the Commissioner's powers pre and post relevant statutory amendments. It underscores the necessity for adherence to legal provisions and established precedents in administrative actions to ensure the integrity and legality of the decision-making process.