2012 (6) TMI 170 - HC - Service Tax

Gross value of taxable services - CHA service - Reimbursement of expenses - Whether Tribunal after issuing an open remand order leaving all issues open should not hold the earlier order against the Revenue - Tribunal just vacated the orders stating that the adjudication order itself contains inconsistent findings Held that - Tribunal s approach itself is not correct because the respondent assessee is engaged in two lines of business both are taxable services under the Finance Act. Therefore, essentially it is a matter of considering as to which are the activities or charges levied that do not constitute consideration for taxable service and only such of the items calls for elimination. When detailed adjudication order is challenged before the Tribunal wherein every receipt and expenditure are considered in assessment, it was the duty of the Tribunal to consider in detail the nature of charges collected by the assessee and to see whether those are for taxable services rendered, and if so to sustain it. Matter remanded to Tribunal. The Tribunal should address all the issues raised against fresh adjudication orders issued after remand.

Summary

Issues:
Challenge to orders cancelling revised demand of service tax, interest, and penalty for the periods 2000-01 to 2004-05 and 2005-06. Tribunal's treatment of open remand orders and ground of limitation. Tribunal's failure to consider all issues in detail during the appeals.

Analysis:
The Service Tax Department filed appeals challenging the Customs, Excise and Service Tax Appellate Tribunal's orders canceling the revised demand of service tax, interest, and penalty against the respondent for the periods 2000-01 to 2004-05 and 2005-06. The respondent company was engaged in taxable services but had not paid service tax on the full taxable value of the services rendered. The Tribunal issued remand orders, leaving all issues open for fresh adjudication. However, in the subsequent round of appeals, the Tribunal allowed the ground of limitation raised by the assessee, which was not challenged by the Revenue.

The appellant contended that the Tribunal should not have held the earlier order against the Revenue after issuing an open remand order. The High Court found it unfair for the Tribunal to treat any matter as concluded in their earlier order, which was an open remand on all issues. The Court emphasized that an open remand means the order is not adverse to any party, and all issues should be considered afresh. The Tribunal's approach of vacating orders without detailed consideration was criticized, especially regarding the nature of charges collected by the assessee for taxable services.

The High Court expressed dissatisfaction with the Tribunal's failure to consider all issues in detail during the appeals. It was deemed necessary for the Tribunal, as the first appellate authority, to thoroughly examine every aspect of the case without taking any shortcuts. The Court directed the Tribunal to reconsider the appeals as if they were first appeals, without being influenced by their previous findings. The Tribunal was instructed to address all issues raised against the fresh adjudication orders issued after remand and to dispose of the appeals within three months.

In conclusion, the High Court allowed the Central Excise Appeals, vacated the Tribunal's orders, and remanded the appeals back to the Tribunal for a detailed reconsideration of all issues raised. The Tribunal was directed to conduct a fresh hearing, considering all aspects of the case without being influenced by previous findings, and to ensure a thorough examination of the matter within a specified timeframe.