2019 (9) TMI 241 - AT - Service Tax

Jurisdiction to issue SCN - Centralised registration taken at Delhi - SCN issued by issued by the Commissioner of Central Excise, Jaipur - HELD THAT - It is undisputed fact that in this case the appellant has obtained the Centralised Registration including the unit at Jaipur with the Commissioner of Service Tax, Delhi. In the previous Show Cause Notice to the appellant the demand has been issued by the Commissioner of Service Tax Delhi, and which was adjudicated by him - So we find as far as jurisdiction is concerned, it is settled in view of Centralised registration that Commissioner of Central Excise and Service Tax, Jaipur lacks the jurisdiction to issue SCN and adjudicate the case in view of the provisions as contained in Rule 4(2) of Service Tax Rules, 1994. Appeal allowed - decided in favor of appellant.

Summary

Issues: Jurisdiction of Commissioner of Central Excise, Demand sustainability

Jurisdiction Issue Analysis: The appellant argued that the demand issued by the Commissioner of Central Excise, Jaipur, was not sustainable due to lack of jurisdiction. They contended that since they had obtained Centralised Registration in Delhi, including the unit in Jaipur, the Commissioner of Central Excise, Jaipur, lacked jurisdiction as per Rule 4(2) of Service Tax Rules, 1994. The Tribunal concurred, noting that the previous Show Cause Notice was issued by the Commissioner of Service Tax, Delhi, and that the Commissioner of Central Excise, Jaipur, did not have the authority to issue the demand. Consequently, the Tribunal held that the Show Cause Notice itself was not sustainable under the relevant laws, setting aside the impugned order solely on the aspect of jurisdiction.

Demand Sustainability Issue Analysis: The appellant argued that the impugned demand was not sustainable on the grounds that the contractual agreement resembled an employee-employer relationship without a profit element. They cited precedents from the Tribunal to support their position. On the other hand, the Revenue contended that there was a profit element between the appellant and Daikin Industries Japan, evidenced by royalty payments and secondment fees. The Revenue also highlighted that certain documentation, such as employee summaries and Form 16, were not submitted by the appellant. However, the Tribunal did not delve into the merits of the case due to the jurisdictional issue. In light of the lack of jurisdiction of the Commissioner of Central Excise, Jaipur, the Tribunal allowed the appeal filed by the appellant and set aside the impugned order, providing consequential relief if necessary.

This judgment by the Appellate Tribunal CESTAT New Delhi primarily addressed the jurisdictional aspect concerning the Commissioner of Central Excise, Jaipur, and the sustainability of the demand raised against the appellant. The Tribunal ruled in favor of the appellant, emphasizing the importance of jurisdictional compliance and setting aside the impugned order solely based on the lack of jurisdiction of the Commissioner of Central Excise, Jaipur.