2016 (9) TMI 1107 - HC - Service Tax

Validity of CESTAT order - Tribunal dismissed the appeal on the ground that matter is pending before the High court - Doctrine of merger - renting of immovable property service - Held that - this Court is deciding the issue as to whether such a transaction would attract service tax or would it be liable and exigible to tax under the Maharashtra Value Added Tax Act, 2002. We are of the view that the Tribunal erred in law in dismissing the appeal as not maintainable. A statutory appeal or a statutory right to appeal was availed of by the appellant/assessee to challenge the Orders-in-Original. Such an appeal was maintainable in law. Once it was so maintainable under the scheme of the Central Excise Act, 1944, which also applies to the levy, imposition and assessment of service tax so also its recovery, then, the Tribunal was bound to decide the appeal on merits. It could not have been dismissed as not maintainable only because the petitioner in the writ petition and the appellant before the Tribunal were pursuing both remedies. The statutory appeal of the assessee, in the absence of any restraint order by the High Court, was maintainable and could have been decided on merits and in accordance with law. If there was no restraint against passing of an adjudication Order, surely, against such an adjudication Order all statutory remedies, including an appeal are available. That is precisely what the appellant/assessee has done and the appeal could not have been dismissed as not maintainable. - Decided in favour of appellant

Summary

Issues Involved:
Whether the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) was justified in dismissing the appeal challenging the Orders passed in Original dated 3-1-2012 and 31-10-2013.

Detailed Analysis:

1. Confirmation of Service Tax Demand:
The Orders-in-Original were passed by the Commissioner of Central Excise, Customs & Service Tax, confirming the service tax demand for the period June 2007 to March 2011 and April 2011 to March 2012 on the 'renting of immovable property service'. The demand was upheld with interest and penalty.

2. Writ Petition Pending:
There is a writ petition pending in the High Court questioning the legality of the levy. The issue being deliberated is whether the transaction in question attracts service tax or falls under the Maharashtra Value Added Tax Act, 2002. Despite the pendency of the writ petition, the Adjudicating Authority proceeded with passing the Orders-in-Original.

3. Maintainability of Statutory Appeal:
The appellant/assessee challenged the Orders-in-Original before the Customs, Excise & Service Tax Appellate Tribunal. The High Court found that the Tribunal erred in law by dismissing the appeal as not maintainable. It was emphasized that the statutory appeal was availed of by the assessee, making it maintainable under the Central Excise Act, 1944. The Tribunal was obligated to decide the appeal on its merits and in accordance with the law.

4. Court's Decision and Direction:
The High Court allowed the appeal, quashing and setting aside the impugned Order. The Tribunal was directed to reconsider the appeal on its merits and in compliance with the law. The Court highlighted that in the absence of a restraint order by the High Court, all statutory remedies, including an appeal, were available to the appellant/assessee.

In conclusion, the High Court found in favor of the appellant/assessee, emphasizing the importance of due process and the availability of statutory remedies. The judgment highlighted the necessity for the Tribunal to consider appeals on their merits and in accordance with the law, irrespective of the parallel proceedings such as writ petitions.