2010 (5) TMI 370 - AT - Service Tax

Revision proceedings - soon after passing of the first appellate order on 16-4-2009 the Revisional Authority issued a show cause notice on 16-6-2009, which is two months thereafter proposing to impose penalty on the appellant invoking provision of Sections 76 & 78 of the Finance Act, 1994 - revisional order passed on 13-11-09 is unsustainable because of conflict of exercise of jurisdiction - Held that - Within two months of passing of the order by the appellate authority, the show cause notice was issued by revisional authority on 16-6-2009, while first appellate order was passed on 16-4-2009 - It is embarrassing for us to declare exercise of jurisdiction by one Commissioner is bad and by the other good - revisional order was unsustainable following the judgment of the Hon ble High Court of Rajasthan in the case cited (supra) - dispose the appeal of the appellant as allowed, so also dispose the stay application

Summary

Issues:
1. Conflict of jurisdiction between the appellate and revisional authority.
2. Validity of the revisional order under Section 84 of the Finance Act, 1994.
3. Timeliness of issuing show cause notice by the revisional authority.

Analysis:
1. The appellant moved a stay application citing conflict of jurisdiction due to the revisional authority issuing a show cause notice proposing penalties under Sections 76 & 78 of the Finance Act, 1994, soon after the first appellate order. The appellant did not challenge the appellate order and argued the revisional order was unsustainable due to conflicting exercise of jurisdiction. The appellant sought relief based on a judgment from the Hon'ble High Court of Rajasthan.

2. The respondent, represented by the DR, defended the revisional order under Section 84 of the Finance Act, 1994, stating that the revenue was aggrieved, leading to the suo motu revision power being exercised by the Commissioner. The respondent contended that the revisional order was valid and held the field.

3. Upon hearing both sides and examining the records, the Tribunal found that the revenue did not wait to initiate revision proceedings after the appellate order. The show cause notice was issued within two months of the appellate order, indicating a lack of proper consideration. The Tribunal noted similar cases and declared the revisional order unsustainable, following the precedent set by the Hon'ble High Court of Rajasthan. The Tribunal disposed of the appeal in favor of the appellant and granted the stay application based on the timeliness issue and the conflict of jurisdiction observed.

In conclusion, the Tribunal ruled in favor of the appellant, highlighting the importance of proper consideration and timing in revision proceedings to avoid conflicts of jurisdiction and ensure a fair legal process.