2022 (3) TMI 556 - AT - Service Tax

Jurisdiction - power of Commissioner (Appeals) under Section 35A(3) of the Central Excise Act, 1944 - Construction, erection, commissioning or installation of original work pertaining to airport, port or railway etc. - HELD THAT - It is to be noted here that the power of the Central Excise Service Tax Appellate Tribunal is limited to the examination of legality of the order passed by the Commissioner (Appeals) and not like the Commissioner (Appeals) s power under Section 35A(3) of the Central Excise Act, 1944 that authorises him to make such further enquiry as may be necessary and pass such order as he finds just and proper. Since, in the instant case exemption notification would only cover part of the disputed period, its application to the entire proceeding can only be determined by the adjudicating authority. In the absence of any finding on its application for wants of its invocation at the time of adjudication proceedings, it would be just and proper to remand the matter back to the original adjudicating authority for fresh adjudication concerning application of Notification No. 25/2012-ST and its amended Notification No. 9/2016-ST, so as to arrive at a conclusion on the sustainability of such duty demand including invocation of the extended period. The appeal is allowed by way of remand for readjudication by the original adjudicating authority and accordingly the order passed by the Commissioner of GST Central Excise Tax (Appeals) Nagpur is set aside.

Summary

Issues:
1. Applicability of exemption notification to service tax demand.
2. Legality of interest and penalty imposition.
3. Jurisdiction of the Central Excise & Service Tax Appellate Tribunal.

Analysis:
1. The case involved a government joint venture company providing works contract services at an airport, facing a service tax demand for unpaid taxes on certain invoices. The appellant contested the demand, specifically challenging the interest and penalty imposed. The Commissioner (Appeals) partially allowed the appeal related to pure supply of goods. The appellant argued for the application of an exemption notification, which had not been raised earlier but was considered a strong legal point. The Tribunal acknowledged the importance of the exemption notification and decided to allow the appeal on remand for further adjudication by the original authority.

2. The Tribunal referred to relevant legal precedents regarding the acceptance of additional grounds as pure law points, emphasizing the need to consider questions of law necessary for correctly assessing tax liability. It clarified the limited scope of its powers compared to the Commissioner (Appeals), highlighting the need for a fresh adjudication by the original authority on the applicability of the exemption notification to the disputed period. The Tribunal concluded that without a specific finding on the notification's application during the initial adjudication, remanding the matter for a comprehensive review was appropriate.

3. Ultimately, the Tribunal allowed the appeal by remanding the case for readjudication by the original adjudicating authority, setting aside the order passed by the Commissioner of GST & Central Excise Tax (Appeals) in Nagpur. The decision was made to ensure a thorough examination of the exemption notification's impact on the duty demand, including the invocation of the extended period. The order was pronounced in open court on 11.03.2022, signifying the Tribunal's commitment to a fair and just resolution based on legal principles and procedural requirements.