2015 (10) TMI 112 - AT - Service Tax

Erection, Commissioning arid Installation Service - Short payment of duty - Held that - Commissioner (Appeals) has failed to exercise the jurisdiction vested in him. The power entrusted on the adjudicating authority can also be exercised by the Commissioner (Appeals), being the first Appellate Authority having the power of enhancement of the demand, including enhancement of imposition of penalty, which the adjudicating authority have. Hon ble Supreme Court has held in C.I.T. v. Kanpur Coal Syndicate - 1964 (4) TMI 18 - SUPREME Court that the powers of the first Appellate Authority in tax matters are co-extensive. Thus, in the interest of justice, we set aside the impugned order and direct the learned Commissioner (Appeals) to decide the appeal on merits after hearing the appellant. We also direct the appellant to appear before the Commissioner (Appeals) and seek the opportunity of hearing. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Delay in filing the appeal and condonation of delay.
2. Tax liability for services provided.
3. Jurisdictional power of the Commissioner (Appeals).

Analysis:
1. Delay in filing the appeal and condonation of delay:
The appellant filed an appeal against the Order-in-Original after a delay of 29 days. The Commissioner (Appeals) considered the reasons for the delay and decided to condone it as the appellant was guided by the time frame mentioned in the Order-in-Original. The Commissioner found a reasonable cause for the delay and invoked the provisions of Section 85 of the Finance Act, 1994 to condone the delay. The appellant had already paid a significant amount of Service Tax, and the appeal was taken up for decision on merits without requiring any further pre-deposit.

2. Tax liability for services provided:
The case involved services provided by the appellant, including trenching and laying underground telephone cables. The Revenue contended that these services fell under the category of "Erection, Commissioning and Installation Service," leading to a demand for Service Tax. The appellant disputed the tax liability but did not challenge the liability itself, seeking non-imposition of penalties due to ignorance. The Commissioner (Appeals) confirmed the demand for Service Tax, interest, and penalties under relevant sections of the Finance Act, 1994. The appellant's belief that no Service Tax was payable on their activities was considered, but the lower authority confirmed the demand without delving into the taxability of the services rendered.

3. Jurisdictional power of the Commissioner (Appeals):
The appellant raised objections regarding the lower Appellate Authority's failure to consider the grounds and legal points on the classification of services. The Commissioner (Appeals) was criticized for not exercising jurisdictional power and failing to address the appellant's arguments. The Tribunal found that the Commissioner (Appeals) had not properly exercised the powers vested in him and directed a remand of the appeal for a fresh decision on merits after hearing the appellant. The Tribunal emphasized that the powers of the first Appellate Authority in tax matters are co-extensive with those of the adjudicating authority, citing relevant legal precedents to support its decision.

In conclusion, the Tribunal allowed the appeal by setting aside the impugned order and remanded the case to the Commissioner (Appeals) for a fresh decision on merits after providing the appellant with an opportunity to be heard. The delay in filing the appeal was condoned, and the case highlighted the importance of properly exercising jurisdictional powers in tax matters to ensure a fair and just decision.