2017 (6) TMI 220 - AT - Service Tax

Maintainability of appeal - CESTAT has mistakenly disposed of the cross objection filed by the respondent without considering the prayer and the grounds contained therein - Held that - the disposal of the cross objection simply with the dismissal of the appeal of the Revenue is not in accordance with the law - the application restored to the extent of restoring the cross objection of the applicant to be decided on merit subject to the cost of ₹ 10,000/- - decided partly in favor of assessee.

Summary

Issues:
1. Application for recalling Final Order
2. Dismissal of appeal due to amount involved
3. Disposal of cross objection without consideration

Issue 1: Application for recalling Final Order
The applicant filed a miscellaneous application to recall Final Order No. 26942/2013 dated 08.11.2013 passed in Appeal No. ST/CO/2/2012. The CESTAT had dismissed the Revenue's appeal as the amount involved was less than ?5,00,000. The respondent had also filed a cross objection in Appeal No. ST/399/2011, aggrieved by the Commissioner (Appeals) order confirming the demand of service tax. The applicant sought to recall the Final Order to address the disposal of the cross objection, which was mistakenly done without considering the prayer and grounds and without hearing the respondent.

Issue 2: Dismissal of appeal due to amount involved
The learned consultant for the applicant argued that the dismissal of the appeal under the mandatory limit and the disposal of the cross objection were not sustainable in law. He contended that the Tribunal did not dispose of the cross objection properly, as it should have been treated as an appeal by the respondent. The respondent had sought adjournment on the day of the order, and the Tribunal decided to proceed in their absence based on the record. The consultant cited relevant legal decisions to support the argument for recalling the order.

Issue 3: Disposal of cross objection without consideration
The learned AR opposed the application, arguing that restoring and deciding the disposed cross objections independently was not permissible and would amount to a review of the order, which the Tribunal lacked the power to do. The AR also challenged the reasons for the delay in filing the application. However, after hearing both parties and considering the cited judgments, the Tribunal found the disposal of the cross objection while dismissing the appeal to be incorrect. The Tribunal accepted the reasons for the delay provided by the applicant and allowed the application to restore the cross objection for a final decision, subject to a cost of ?10,000 to be paid by a specified date.

In conclusion, the Tribunal granted the application to recall the Final Order to the extent of restoring the cross objection of the applicant for a proper consideration on its merits, emphasizing the importance of following legal procedures and ensuring fair hearings in such matters.