2017 (1) TMI 712 - AT - Service Tax

Jurisdiction - power of the Commissioner (Appeals) to remand the case - Held that - The law contained under section 85(5) of the Finance Act, makes it clear that the said provision does not prohibit the Commissioner (Appeals) from passing an order of remand of the matter - there is no infirmity in the order passed by the Commissioner (Appeals) in directing the re-examination of the issue and remand of the matter. It is seen that the Commissioner (Appeals) has upheld the penalty imposed under section 78 and has given the option of reduced penalty of 25% of the service tax demand. It is settled law that penalty under section 76 and 78 cannot be simultaneously imposed. The amount involved in all the three appeals is below ₹ 10 lakhs. From the above, the appeals filed by department are dismissed on merits, as well as on monetary limits - appeal dismissed - decided against Revenue.

Summary

Issues Involved:
- Challenge to the order passed by the Commissioner (Appeals) directing re-examination and quantification of service tax payable by respondent.
- Contention regarding the powers of the Commissioner (Appeals) to remand the matter.
- Dispute over the penalty imposed under sections 76 and 78 of the Finance Act.
- Monetary limit of the amount involved in the appeals.

Analysis:

1. The department appealed the order by the Commissioner (Appeals) directing re-examination and quantification of service tax payable by the respondent, challenging the remand of the matter and the penalty imposition. The department argued that the Commissioner (Appeals) lacked the authority to remand the issue and should not have set aside the penalty under section 76. However, the Tribunal noted that as per section 85(5) of the Finance Act, the Commissioner (Appeals) is not prohibited from remanding the matter. Citing the precedent in the case of Commissioner Vs Associated Hotels, the Tribunal upheld the Commissioner (Appeals) decision to direct re-examination and remand the issue.

2. The department further contested the setting aside of the penalty under section 76 by the Commissioner (Appeals). The Tribunal observed that while the penalty under section 78 was upheld, the option of a reduced penalty of 25% of the service tax demand was provided. It was clarified that penalties under sections 76 and 78 cannot be imposed simultaneously. Considering this legal principle and the fact that the amount involved in all appeals was below the monetary limit of ?10 lakhs, the Tribunal found no fault in the decision of the Commissioner (Appeals) to set aside the penalty under section 76.

3. Ultimately, the Tribunal dismissed the appeals filed by the department both on merits and due to the monetary limits involved in the cases. The judgment highlighted the legal provisions regarding the powers of the Commissioner (Appeals) to remand matters, the distinction between penalties under sections 76 and 78, and the monetary threshold for appeal consideration. The order was pronounced and dictated in open court, concluding the matter comprehensively.

This detailed analysis of the judgment provides a clear understanding of the issues involved, the arguments presented, and the legal reasoning behind the Tribunal's decision in each aspect of the case.