2021 (9) TMI 386 - AT - Service Tax

Power of commissioner (appeals) to remand back the case - Non payment of service tax - tour operator service - matter was remanded to the original Adjudicating Authority directing the detailed examination in terms of Circular No. 117/11/2009-ST dated 30.10.2009 and Place of Provisions Rules, 2012 and also in the light of the concept of negative list of services - power of Commissioner (Appeals) to remand the matter - Section 35A(3) of Central Excise Act, 1944 amended with effect from 11.05.2001 - HELD THAT - As apparent from the impugned order under challenge, Commissioner (Appeals) has not reflected the opinion as to whether he has accepted the reasoning of the Original Adjudicating Authority or is rejecting the same. The order is silent about any proposed modification. It simply has directed the Original Adjudicating Authority to reconsider directing the detailed examination in terms of Circular No. 117/11/2009-ST dated 30.10.2009 and Place of Provisions Rules, 2012 and also in the light of the concept of negative list of services as prevalent from 01.07.2012 onwards. In Section 35A(3) as exists on date, sending back the matter to Original Adjudicating Authority with such directions is no more in competence of Commissioner (Appeals) since Section 35A (3) stands amended with effect from 11.5.2001. The order under challenge is not either of the one as is mentioned in sub clause (3) of Section 35A. It is precisely an order of remand which power stand withdrawn from Commissioner (Appeals). This order from no sense of interpretation can be held to have been passed either under the power of annulling or the power of confirming or the power of modifying - In the present case, the order of Commissioner (Appeals) is not in terms of directions which may amount to modification neither of annulling nor of confirming. It is clear cut order of remand directing Original Authority to reconsider the facts and pass the fresh order. It is clear that the order under challenge is beyond the competent jurisdiction of Commissioner (Appeals) - it is deemed to be a fit case to set aside the same - Commissioner (Appeals) is directed to adjudicate the same on merits in any of the three forms as are mentioned in amended section 35A(3) of Central Excise Act - appeal allowed by way of remand.

Summary

Issues:
Jurisdiction of Commissioner (Appeals) to pass an order of allowing the appeal by way of remand.

Analysis:
The present appeal revolves around the question of whether the Commissioner (Appeals) has the jurisdiction to pass an order allowing the appeal through remand. The provisions related to filing appeals before the Commissioner (Appeals) are outlined in Chapter VI A of the Central Excise Act, 1944. Section 35A of the Act governs the procedure for such appeals. Prior to an amendment on 11.5.2001, the Commissioner (Appeals) had the authority to remand matters back to the adjudicating authority for fresh consideration. However, the amendment withdrew this power, as clarified by the Hon'ble Apex Court in a relevant case. The amendment explicitly deleted the provision allowing the Commissioner (Appeals) to refer the case back for fresh adjudication or decision. Despite arguments suggesting that the power to annul includes the power to remand, the current legal framework does not support this interpretation. The order under challenge directed the original adjudicating authority to reconsider without clearly annulling, confirming, or modifying the decision, indicating a remand. Therefore, the Commissioner (Appeals) exceeded their jurisdiction by issuing a remand order post the 2001 amendment.

Moreover, the reliance on previous decisions, such as the Commissioner of Customs, Jamnagar vs. Reliance Industries Ltd., does not alter the conclusion. The decision in question was based on circumstances different from the present case, where the directions given were considered as modifications rather than a remand. The argument of a contradiction with an earlier judgment is dismissed, as the amendment in 2001 significantly altered the scope of the Commissioner (Appeals) powers. The order under review, being a clear remand, does not align with the post-amendment legal framework. Therefore, the order is deemed beyond the Commissioner (Appeals) jurisdiction, rendering it void ab initio / non est.

In conclusion, the appeal is allowed by setting aside the order under challenge, directing the Commissioner (Appeals) to adjudicate the matter on its merits within the scope of the amended Section 35A(3) of the Central Excise Act.