2006 (2) TMI 41 - AT - Service Tax

Service Tax - No provision for Commissioner reviewed order-in-original and directed Asstt. Commissioner to file appeal before the Commissioner (Appeal) - Section 83 excludes applicability of Section 35E to service tax matter - Order-in-appeal set aside

Summary

Issues:
Appeal against Order-in-Appeal for refund sanctioning.

Analysis:
The appeals were directed against the Order-in-Appeal where the appellate authority set aside the Order-in-Original regarding the refund sanctioned to the appellants. The appellants availed the services of goods transport operators and C&F agents, discharging their service tax liability. Following a Supreme Court decision, they claimed a refund for the service tax paid as service tax receivers. The adjudicating authority accepted their contention and sanctioned the refund. However, the Commissioner reviewed the order and directed the filing of an appeal before the Commissioner (Appeals), who set aside the order sanctioning the refund. The issue revolved around the applicability of Section 35E (2) of the Central Excise Act, with the appellants arguing that this provision was not applicable to service providers. The Commissioner's power to review and direct the filing of an appeal was also contested.

The Tribunal analyzed the relevant provisions of the Finance Act, 1994, specifically Section 83 and Section 84. Section 83 applied certain provisions of the Central Excise Act to service tax, but Section 35E was not made applicable during the relevant period. On the other hand, Section 84 granted the Commissioner the power to review orders but did not authorize the direction to file an appeal. The Tribunal held that the Commissioner did not have the authority to direct the subordinate to file an appeal, as it was beyond the scope of his powers during that period.

Referring to a similar case, the Tribunal emphasized that there was no provision for reviewing an order and directing a Deputy Commissioner to file an appeal before the Commissioner (Appeals). Consequently, the Tribunal set aside the Order-in-Appeal dated 30.12.2004 and 24.1.2005, allowing the appeal with any consequential relief for the appellants. The decision highlighted the lack of legal authority for the Commissioner's actions in directing the filing of an appeal, leading to the appeal being allowed and the Orders-in-Appeal being set aside.