2014 (8) TMI 609 - HC - Central Excise

COD Clearance entitled to the benefit of the order recalling directions given in the ONGC s Ltd. 2007 (7) TMI 354 - Supreme Court - Held that - Spirit of the judgment given by the Apex Court in Electronics Corpn. of India Ltd. (2011 (2) TMI 3 - Supreme Court) should have been kept in mind by the CESTAT, particularly, when such a judgment has already been passed on 17.02.2011, i.e. much before the impugned order was passed by the CESTAT, i.e. 27.11.2012/29.11.2012. That being so, we are of the view that CESTAT should have considered the appeal and the application on its merits instead of dismissing the same for the want of clearance from CoD. - Decided in favour of assessee.

Summary

Issues:
Service Tax Appeal against order dismissing appeal for want of clearance from Committee on Disputes (CoD).

Analysis:
The Service Tax Appeal was filed against an order passed by the Customs, Excise and Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata, dismissing the appeal due to the lack of clearance from the Committee on Disputes (CoD). The appellant, an organization engaged in construction and engineering services, challenged a show cause notice regarding Service Tax liability. The appellant was directed to deposit 50% of the Service Tax amount as a condition to stay the adjudication order. The appeal was dismissed by the Tribunal on the grounds of CoD clearance, citing precedents like Oil and Natural Gas Commission cases. However, subsequent to these cases, the Apex Court observed in Electronics Corpn. of India Ltd. v. Union of India that the CoD mechanism has led to delays and outlived its utility, recalling the directions issued in previous cases related to CoD clearance.

The appellant argued that the Tribunal erred in dismissing the appeal solely based on the lack of CoD clearance, especially after the directions in the earlier ONGC cases had been repealed. The respondent contended that since the appeal was filed before the Electronics Corpn. of India case judgment, the appellant could not benefit from the order recalling directions in the ONGC cases. The Court considered the spirit of the Apex Court's judgment in Electronics Corpn. of India Ltd. and held that the Tribunal should have considered the appeal on its merits rather than dismissing it for want of CoD clearance. As the judgment in Electronics Corpn. of India Ltd. was passed before the impugned order, the Court allowed the appeal, setting aside the Tribunal's order and directing a reconsideration of the appeal and application on their merits by the Tribunal.