2019 (5) TMI 378 - AT - Service Tax

Modification in remand order - case of appellant is that the remand order of the first appellate authority may be modified to the extent that all issues may be left free for the original authority to decide including the penalty therein - HELD THAT - The events have moved further after the appellant filed this appeal and the impugned order was followed by a Denovo adjudication order by the lower authority. Ld. Consultant submits that they propose to appeal against the Denovo adjudication order before the first appellate authority but have not done so yet. They still have time to file an appeal. There is no reason to set aside the impugned order of the first appellate authority. This Bench cannot take a decision on whether the first appellate authority is correct in upholding the penalty or otherwise, without deciding on the merits of the case itself. Since the entire demand has now been confirmed in the Denovo adjudication order and is likely to be appealed before the first appellate authority, the matter can be decided at his level. The appeal filed by the appellant is dismissed as infructuous.

Summary

Issues: Appeal against Order-in-Appeal regarding imposition of penalties and re-computation of taxable value.

Analysis:
1. The appellant, a Chartered Accountant firm, filed an appeal against Order-in-Appeal No. HYD-EXCUS- SC-AP2-0059-18-19-ST, which confirmed the demand, interest, and penalties imposed by the lower authority. The first appellate authority remanded the matter for re-computation of taxable value and tax liability, while upholding the penalties. The appellant contested the imposition of penalties, arguing that the first appellate authority restricted the lower authority's discretion in deciding on penalties. They sought modification of the remand order to allow the original authority to decide on all issues, including penalties.

2. The Departmental Representative supported the lower authority's decision, emphasizing that penalties were correctly imposed on the appellant, a Chartered Accountant firm, for failure to pay service tax within the normal period. The appellant's request for re-computation of taxable value was based on amounts received as expenses paid to other Chartered Accountants, which they claimed were not taxable. However, this claim lacked substantiation, leading the first appellate authority to remand the matter for re-computation. Subsequently, the lower authority issued a Denovo adjudication order confirming the demand, interest, and penalties.

3. The Tribunal noted that events had progressed post the appeal filing, with the issuance of the Denovo adjudication order by the lower authority. The appellant intended to appeal this order but had not done so yet. Given the ongoing developments and the likelihood of an appeal before the first appellate authority, the Tribunal deemed the current appeal seeking modification of the impugned order as infructuous. The Tribunal asserted its inability to decide on the correctness of upholding penalties without delving into the case's merits, which could be addressed at the first appellate authority level. Consequently, the appeal filed by the appellant was dismissed as infructuous.