2016 (3) TMI 403 - AT - Service Tax

Monetary limit - whether departmental internal instructions biding upon the tribunal - Validity of direction issued by the AC to adjudicating authority to implement the appellate order beyond the scope of order in appeal - additional ground sought to be raised in the appeal - eligibility of M/s Himalaya Tyres for threshold limit, applicable to small service-providers under notification no. 6/2005-ST dated 1 st March 2005 - Held that - The introduction of additional ground of appeal through the review undertaken in exercise of powers conferred by section 86(2A) of Finance Act, 1994 is outside the scope of these proceedings. We notice that the impugned order has not touched upon imposition of penalty under section 76 while disposing off the order of the original authority dated 11 th December 2009 against which the assessee had filed an appeal before Commissioner of Central Excise & Customs (Appeals), Aurangabad. - Additional ground not admitted. Our reason for not deciding on merits is prompted by the letter of respondent dated 8th January, 2016 placed before us in lieu of representation and seeks dismissal of appeal of Revenue as the amount in dispute is below the threshold limit that allows exercise of discretion in refusing to hear the matter. We notice that this is so and, additionally, that it is well below the prevailing limit of ₹ 10 lakhs prescribed by the Central Board of Excise and Customs, in its instruction in F.No. 390/Misc./163/2010-JC dated 17 th December 2015 in exercise of powers under section 35R of the Central Excise Act, 1944 made applicable to Finance Act, 1994 for filing appeals before the Tribunal. Taking cognizance of the tax amount in dispute and the non-applicability of the exclusions in the instruction supra, we dismiss the appeal filed by Commissioner of Central Excise & Customs, Aurangabad. The cross-objection is also disposed of. - Decided against the revenue.

Summary

Issues:
- Appeal filed by Revenue against order-in-appeal
- Misdirection in the impugned order
- Imposition of penalty under Section 76 of Finance Act, 1994
- Introduction of additional ground of appeal
- Dispute regarding service tax payment by the respondent
- Lack of certainty in the quantification of differential amount
- Compliance by original authority with terms of appellate authority's order
- Dismissal of appeal based on threshold limit
- Contrary views on the dismissal of appeal
- Non-cooperation in disposal of listed matters
- Seeking adjournment of a listed matter
- Control over departmental authorities by the Tribunal
- Implementation of policies of the Central Government
- Dismissal of the appeal based on tax amount in dispute

Analysis:

The appeal was filed by the Revenue against an order-in-appeal that annulled the original authority's order and directed the implementation of another order. The Revenue contended that the misdirection in the impugned order should be set aside, especially regarding the eligibility of the service provider for a threshold limit under a specific notification. Additionally, the Revenue sought the imposition of a penalty under Section 76 of the Finance Act, 1994. The introduction of an additional ground of appeal was challenged, stating it was outside the scope of the proceedings. The Tribunal noted that the first appellate authority did not impose a penalty under Section 76, and therefore, the appeal was not pursued on merits in this regard.

Regarding the dispute over service tax payment by the respondent, it was highlighted that the quantification of the differential amount lacked certainty. Despite multiple orders and modifications by the appellate authority, there were inconsistencies in the imposition of penalties, leading to confusion and unnecessary burden on the respondent. The Tribunal expressed concerns over the lack of communication and coordination within the departmental authorities, emphasizing the need for adherence to adjudicatory hierarchy.

The dismissal of the appeal was also based on the threshold limit prescribed by the Central Board of Excise and Customs, which was below the amount in dispute. The Tribunal highlighted the exclusions where appeals could be pursued despite the limit, such as constitutional validity challenges or classification and refund issues. The conflicting views on the dismissal of the appeal were addressed, emphasizing the importance of cooperation in the disposal of listed matters and adherence to the Tribunal's procedures.

Furthermore, the Tribunal underscored the control it exercises over departmental authorities and the need for compliance with its decisions. It cautioned against personal disinclination or ideological discord affecting policy implementation. The Tribunal dismissed the appeal based on the tax amount in dispute and emphasized the need for adherence to the Central Government's policies and instructions. The observations made were intended to educate and ensure hierarchical decorum and institutional credibility were maintained.