2016 (10) TMI 744 - AT - Service Tax

Power of Commissioner to direct lower authority to file an appeal before Commissioner (Appeals) on 14.08.2009 - refund of service tax - service utilized for export of the goods in terms of notification No. 41/2007-ST dated 6.10.2007 - Section 84 of the Finance Act, 1994 replaced subsequently on 19.08.2009 - whether it was within the jurisdiction of the Commissioner to direct the lower authority to file an appeal prior to 19.08.2009 on which date section 84 was replaced? - w.e.f. 19.08.2009 the provisions of section 84 were changed and the Commissioner was empowered to examine the order of the adjudicating authority and if he was not satisfied, to direct the said authority to file an appeal before the Commissioner (Appeals). Held that - The impugned order of the Assistant Commissioner, in the present proceedings, was passed on 26.05.2009 and the order in review by the Commissioner directing the Assistant Commissioner to file an appeal was passed on 14.8.2009 i.e. before 19.08.2009. As such, it can be safely held that, during the relevant period, there were no powers or jurisdiction with the Commissioner to direct the Assistant Commissioner to challenge the order passed by him before the Commissioner (Appeals). As such, the appeal filed by the Assistant Commissioner before the Commissioner (Appeals) in terms of the order-in-review dated 14.08.2009 is without jurisdiction and against the clear law laid down in the Act. Consequently, the order-in-original passed by the Commissioner (Appeals) is bad in law, being beyond jurisdiction. At this stage, that the Commissioner has passed the review order dated 14.08.2009 in exercise of the provisions of sub-section (2) of Section 35-E of the Central Excise Act, 1944. The dispute in the present appeal relates to the refund of the service tax, excess paid by the assessee, and as such the provisions of the Finance Act, 1994 would apply - the issue stands considered in the case of BHANDARI FOILS PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, BHOPAL 2002 (4) TMI 122 - CEGAT, COURT NO. IV, NEW DELHI . Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Jurisdiction of the Commissioner to direct lower authorities to file an appeal before the Commissioner (Appeals).
2. Applicability of Section 83 of the Finance Act, 1994 in disputes related to service tax.

Analysis:

Issue 1:
The appellant, an exporter, claimed a refund of service tax paid for goods exported. The original adjudicating authority allowed the refund claims, which was reviewed by the Commissioner directing the Assistant Commissioner to file an appeal before the Commissioner (Appeals). The appellant challenged this direction, arguing that prior to 19.08.2009, the Commissioner did not have the power to direct lower authorities to file an appeal before the Commissioner (Appeals). The Tribunal examined the relevant provisions of the Finance Act, 1994, and noted that before the amendment on 19.08.2009, the Commissioner could call for records and pass orders, but not direct subordinates to file appeals. As the review order directing the appeal was issued before the amendment, the Tribunal held that it was without jurisdiction. Citing past tribunal decisions, the Tribunal set aside the order-in-appeal passed by the Commissioner (Appeals) as unlawful and beyond authority.

Issue 2:
The Tribunal also considered the applicability of Section 83 of the Finance Act, 1994, which adopts certain provisions of the Central Excise Act, 1944 for service tax disputes. It was observed that while specific provisions were adopted, Section 35-E was not included. This led to the conclusion that the order directing the lower authority to file an appeal before the Commissioner (Appeals) exceeded the scope of Section 83 itself. Relying on prior tribunal decisions, the Tribunal found the impugned order of the Commissioner (Appeals) to be without jurisdiction and accordingly set it aside, allowing the appeal with consequential relief to the assessee.

This judgment clarifies the limitations on the Commissioner's power to direct appeals before the Commissioner (Appeals) before a specific amendment date and highlights the importance of adhering to statutory provisions in such directions. The analysis underscores the significance of precise statutory interpretation in resolving jurisdictional issues in tax matters.