2002 (8) TMI 150 - AT - Central Excise

Issues Involved:
1. Validity of Section 117 of the Finance Act, 2000.
2. Jurisdiction for fresh assessment proceedings.
3. Requirement of a show cause notice for review under Section 84 of the Finance Act, 1994.
4. Applicability of the decision in the TISCO case.
5. Time-barred nature of the show cause notice dated 18-2-99.

Issue-Wise Detailed Analysis:

1. Validity of Section 117 of the Finance Act, 2000:
The appellants contended that Section 117 of the Finance Act, 2000 is merely a validating provision and does not grant fresh jurisdiction for new assessments. They argued that Section 117 only validates actions taken during the specified period and prevents refunds but does not authorize fresh levies. However, the tribunal found that Section 117 explicitly validates actions taken or anything done during the period from 16-7-1997 to 12-5-2000, including the recovery of service tax refunded pursuant to any judgment or order. The tribunal concluded that Section 117 is not limited to preventing refunds but also validates the levy and collection of service tax.

2. Jurisdiction for Fresh Assessment Proceedings:
The appellants argued that fresh assessment proceedings are barred under Section 117. The tribunal, however, clarified that the show cause notice issued on 18-2-99 was within the period validated by Section 117, and therefore, the action taken by the Revenue was valid. The tribunal noted that the Commissioner of Central Excise, exercising powers under Section 84 of the Finance Act, 1994, revived the show cause notice following the enactment of Section 117. Thus, the tribunal rejected the appellants' claim that fresh assessment proceedings were initiated.

3. Requirement of a Show Cause Notice for Review under Section 84 of the Finance Act, 1994:
The appellants contended that the review under Section 84 was flawed as the show cause notice did not state the grounds for review. They cited the Calcutta High Court decision in Electro House v. C.I.T., West Bengal II, which held that a notice must state the grounds for revision. The tribunal, however, found that the notice dated 14-5-2001 did contain reasons for reviewing the adjudication order, specifically mentioning the validation of the levy and collection by Section 117. The tribunal concluded that the notice was neither ambiguous nor vague.

4. Applicability of the Decision in the TISCO Case:
The appellants relied on the TISCO case, arguing that the validation provision does not confer a right to make fresh levies. The tribunal distinguished the TISCO case, noting that it involved the validation of collections already made by State Governments, whereas in the present case, the Revenue had already initiated action for levying service tax by issuing a show cause notice. The tribunal held that the decision in the TISCO case was not applicable to the present matter.

5. Time-Barred Nature of the Show Cause Notice Dated 18-2-99:
The appellants argued that the show cause notice was time-barred as it was issued for the period from 16-11-1997 to 1-6-1998, beyond the six-month limitation period. The tribunal noted that this issue should be considered by the Deputy Commissioner during the fresh adjudication. The tribunal did not find any reason to interfere with the impugned order and rejected the appeal filed by the appellants.

Conclusion:
The tribunal upheld the validity of Section 117 of the Finance Act, 2000, confirmed the jurisdiction for the revival of assessment proceedings, found the review notice adequately justified, distinguished the TISCO case, and deferred the consideration of the time-barred issue to the Deputy Commissioner. The appeal was rejected, affirming the Commissioner's order to pass a fresh adjudication.

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