2017 (5) TMI 238 - AT - Service Tax

Jurisdiction - power of Commissioner (Appeals) to restore an appeal - Pre-deposit - VCES scheme - insufficiency of the amount of pre-deposit u/s 35F of the CEA, 1944 - Held that - there has been failure on the part of ld. Commissioner (Appeals) to exercise the jurisdiction vested in him, as an appellate court. Section 151 Code of Civil Procedure, 1908 provides nothing in this code shall be deemed to limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of Justice to prevent abuse of the process of the Court - the ld. Commissioner have inherent jurisdiction, as provided in Section 151 Code of Civil Procedure, 1908, which he is failed to exercise - this appeal is allowed by way of remand with the directions to ld. Commissioner (Appeals) to give opportunity of hearing to the appellant on merits - appeal allowed by way of remand.

Summary

Issues:
1. Sufficiency of pre-deposit under Section 35F of the Central Excise Act, 1944.
2. Refusal by Commissioner (Appeals) to exercise inherent jurisdiction.
3. Violation of principles of natural justice.

Analysis:
1. The appellant's appeal was dismissed for insufficiency of the pre-deposit amount under Section 35F of the Central Excise Act, 1944. The appellant had initially deposited 7.5% of the total amount but the Commissioner did not recognize the part of the tax deposited under VCES, leading to the dismissal of the appeal. Subsequently, the appellant deposited the shortfall amount, but the application for restoration of the appeal was rejected by the Commissioner. The Tribunal observed that the Commissioner (Appeals) does not have the authority to restore an appeal decided under Section 35A of the Act, suggesting the appellant approach a higher appellate forum for redressal.

2. The appellant argued that the Commissioner's refusal to restore the appeal amounted to a defeat of justice, as the Commissioner failed to exercise the inherent jurisdiction vested in him. The appellant contended that no defect memo was issued to rectify the deficiency in the pre-deposit amount, violating the principles of natural justice. The Tribunal noted the failure of the Commissioner to exercise jurisdiction as an appellate court, citing Section 151 of the Code of Civil Procedure, 1908, which allows courts to make necessary orders for the ends of justice and prevent abuse of the court's process.

3. The Tribunal held that the Commissioner has inherent jurisdiction under Section 151 of the Code of Civil Procedure, 1908, which was not exercised in this case. The appeal was allowed by way of remand, directing the Commissioner (Appeals) to provide the appellant with a hearing on merits and pass a reasoned order. The Tribunal also confirmed the sufficiency of the amount deposited as required under Section 35F of the Central Excise Act, 1944. The appeal was registered, and the miscellaneous application was disposed of, with the order to be issued accordingly.