2016 (11) TMI 1231 - AT - Service Tax

Enhancement of penalty under Section 76 of the Act - jurisdiction of Commissioner of Service Tax - Section 84 of Finance Act - the adjudication order was challenged before the learned Commissioner (Appeals) by the appellants and the appeal was pending before the learned Commissioner (Appeals) - Held that - As per Section 84 (4) of the Finance Act, 1994 no order under this Section shall be passed by the Commissioner of Service Tax in respect of any issue if an appeal against such issue is pending before the Commissioner of Service Tax (Appeals) . On plain reading of the above said provisions it is clear that if the adjudication order has been challenged before the learned Commissioner (Appeals), the learned Commissioner of Service Tax seized his power to review the adjudication order. As appellant has challenged the leviability of penalty itself, therefore, question of enhancement of penalty does not arise - the Commissioner of Service Tax ceased to have this power to review the adjudication order under Section 84 of the Finance Act, 1994. Appeal allowed - decided in favor of appellant-assessee.

Issues:
1. Jurisdiction of Commissioner of Service Tax under Section 84 of the Finance Act for review and enhancement of penalty.
2. Applicability of Section 84(4) of the Finance Act when an appeal is pending before the Commissioner (Appeals).

Analysis:
1. The case involved an appeal against an order where the Commissioner of Service Tax had enhanced the penalty under Section 76 of the Finance Act. The appellant challenged this enhancement, arguing that the Commissioner had no power under Section 84 to review the order while an appeal was pending before the Commissioner (Appeals). The appellant relied on the decision in CCE vs. Shiva Builders to support this contention.

2. The Authorized Representative opposed the appellant's argument, stating that the Commissioner's power under Section 84 was valid as the appellant had challenged the adjudication order on merits, not the penalty enhancement. The Commissioner's action was justified based on the specific issue of penalty enhancement, which was not the subject of the pending appeal before the Commissioner (Appeals).

3. Upon hearing both parties, the Tribunal considered the provisions of Section 84(4) of the Finance Act, which state that no order can be passed by the Commissioner of Service Tax if an appeal against the same issue is pending before the Commissioner (Appeals). The Tribunal noted that as the appellant had challenged the penalty itself, the question of enhancing the penalty did not arise. Additionally, the Tribunal referred to a judgment of the Hon'ble High Court of Punjab & Haryana in the case of CCE vs. Shiva Builders, which supported the appellant's argument.

4. The Tribunal further analyzed the relevant provisions of Section 84 of the Finance Act, emphasizing that if any issue is pending in appeal, the revisional jurisdiction cannot be exercised. The Tribunal highlighted that even the higher liability of the assessee had to be considered an issue before the Commissioner (Appeals) as per Section 35A(3) of the Central Excise Act, 1944.

5. Based on the above discussion and interpretation of the legal provisions, the Tribunal concluded that the Commissioner of Service Tax did not have the power to review the adjudication order under Section 84 of the Finance Act while an appeal was pending before the Commissioner (Appeals). Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

This detailed analysis of the judgment highlights the key legal issues surrounding the jurisdiction of the Commissioner of Service Tax under Section 84 of the Finance Act and the applicability of relevant provisions when an appeal is pending before the Commissioner (Appeals).

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