2018 (9) TMI 751 - AT - Service Tax

Review of Order - GTA Service - Review sought on the ground that appellant had not produced declarations of non availment of CENVAT credit on capital goods & inputs on the consignment notes of the GTA services, in order to avail the benefit of N/N. 35/2004 - Scope of SCN - Held that - The basis of allegations in the show cause notice issued by Commissioner as reviewing authority, were not raised in the show cause notice adjudicated by first appellate authority, and the Adjudicating Authority had also not recorded any findings on this point because as it was not alleged - the provisions of Section 84 mandates review of Order-in-Original passed by Original Authority below the Commissioner, on the allegations in the show cause notice already issued and adjudicated and cannot traverse beyond the scope of original show cause notice. On this ground itself the impugned order is liable to be set aside and we do so. The provisions of Section 84 mandates review of Order-in-Original passed by Original Authority below the Commissioner, on the allegations in the show cause notice already issued and adjudicated and cannot traverse beyond the scope of original show cause notice. On this ground itself the impugned order is liable to be set aside. Appeal allowed.

Summary

Issues: Jurisdiction of the reviewing authority under Section 84 of Finance Act, 1994

The judgment by the Appellate Tribunal CESTAT Hyderabad involved the issue of the jurisdiction of the reviewing authority under Section 84 of the Finance Act, 1994. The case revolved around a demand for service tax liability on the appellant under the Goods Transport Agency (GTA) service for the period between January 2005 to September 2006. The appellant had paid service tax on 25% of the freight charges under Notification No. 35/2004-ST. A show cause notice was issued for the remaining 75% of the amount, alleging non-production of declarations regarding CENVAT credit on capital goods and inputs. The Adjudicating Authority initially dropped the proceedings, but the Commissioner of Central Excise and Service Tax issued a show cause notice seeking to review the Order-in-Original. The Tribunal observed that the reviewing authority cannot go beyond the scope of the original show cause notice, and as the new allegations were not raised initially, the impugned order was set aside on this ground.

The Tribunal highlighted that the reviewing authority's jurisdiction under Section 84 of the Finance Act, 1994 is limited to reviewing the Order-in-Original based on the allegations in the original show cause notice. It was emphasized that the reviewing authority cannot introduce fresh grounds beyond the scope of the initial notice. The Tribunal found that the Adjudicating Authority did not record any findings on the new allegations as they were not part of the original show cause notice. Therefore, the Tribunal held that the impugned order was liable to be set aside based on this limitation of jurisdiction.

The Tribunal refrained from addressing other submissions made by both parties, as the appeal was disposed of based on the issue of jurisdiction to issue a show cause notice on new grounds. The Tribunal concluded that the appeal stands allowed, setting aside the impugned order. The judgment was pronounced and dictated in open court by the Tribunal.