2016 (12) TMI 36 - AT - Service Tax

Jurisdiction - whether the Commissioner (Appeals), while decising a service tax appeal has powers to remand the matter to the adjudicating authority? - Held that - it is clear that the sub-section 4 of Section 85 of Finance Act, does not specifically curtail the power to remand as in the case of Section 35 (A) (3) Central Excise Act. Reliance placed on the decision of the case of CST Vs Associated Hotels ltd. 2014 (4) TMI 406 - GUJARAT HIGH COURT , where After analyzing sub-section 4 of Section 85 of Finance Act, the Hon ble High Court observed that the Commissioner (Appeals) can pass such order as it thinks fit including the orders for enhancing tax , interest, or penalty and that such powers would include the power to remand also. The impugned order remanding the matter to the original authority does not call for any interference - appeal dismissed - decided against Department.

Summary

Issues:
- Whether the Commissioner (Appeals) has powers to remand the matter to the adjudicating authority in a service tax appeal.

Analysis:
The case involved appeals filed by the department challenging an order remanding the matter to the original adjudicating authority by the Commissioner (Appeals). The department argued that under the amended provisions of Section 35(A)(3) of the Central Excise Act, the powers of remand by the Commissioner (Appeals) were taken away. They relied on judgments in M/s MIL India Ltd. Vs CCE Noida and Cochin International Airport Vs CCE Cochin to support their position. On the other hand, the respondent contended that sub-section 4, Section 85 of the Finance Act, 1994 did not restrict the power of the Commissioner (Appeals) to remand the matter, citing a judgment by the High Court of Gujarat in CST Vs Associated Hotels Ltd.

The key issue to be considered was whether the Commissioner (Appeals) had the authority to remand the matter in a service tax appeal. The interpretation of sub-section 4 of Section 85 of the Finance Act, 1994 was crucial in determining this issue. The judgment in CST Vs Associated Hotels Ltd. highlighted that the Commissioner (Appeals) could pass orders enhancing tax, interest, or penalty, including the power to remand. The court distinguished this case from the decision in MIL India Ltd. case, emphasizing that the power of remand by the Commissioner (Appeals) under the Central Excise Act was not directly applicable to appeals under the Finance Act, 1994.

Ultimately, the Tribunal ruled in favor of the respondent, holding that sub-section 4 of Section 85 of the Finance Act did not restrict the power to remand as seen in the Central Excise Act. Following the precedent set in the Associated Hotels Ltd. case, the Tribunal concluded that the order remanding the matter to the original authority did not warrant interference, and thus, dismissed the department's appeal.