2018 (7) TMI 1280 - HC - Central Excise

Validity of Remand of matter to Commissioner - appellant s grievance is that the final order of CESTAT remanding the matter for fresh adjudication by the Commissioner is erroneous, inasmuch as, the Tribunal failed to discharge its obligations to consider the record - Held that - It is evident from the consideration of the record that the Commissioner rendered elaborate findings on both the genuineness of the document (agreement dated 30.06.2006) as well as on its interpretation. Given these facts, if the Tribunal was in doubt as to whether the document was genuine, the least that it could have done was to limit the findings on remand while retaining Revenue s appeal on the file. This Court notices that CESTAT has been repeatedly passing remand orders virtually abdicating its responsibility as an Appellate Court. This trend is unhealthy given that it is the final Court of fact and is required to adjudicate both on the issues of fact and law, especially in matters such as the present one i.e. where the appeal before it was by way of the first appeal. This Court hereby sets aside the impugned order - The Tribunal is hereby directed to render specific findings on the issue after taking into account the submissions of the parties and calling for a limited remand findings on the issue of genuineness of the document alone - appeal allowed.

Summary

Issues:
1. Appellant's grievance under Section 35G of the Central Excise Act, 1944 regarding CESTAT's remand order for fresh adjudication by the Commissioner.

Analysis:
The appellant challenged the final order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) under Section 35G of the Central Excise Act, 1944, arguing that the Tribunal failed to consider the record before remanding the matter for fresh adjudication by the Commissioner. The dispute arose from a show cause notice alleging the appellant's liability to pay service tax to M/s Jefferies International Limited (JIL) for the period 2006-07. The Commissioner initially dropped the demand based on the appellant's contentions supported by a legal agreement dated 30-06-2006. The Revenue's appeal to CESTAT disputed these findings, claiming that the agreement dated 30-06-2006 was not the only relevant document and that the earlier letter agreement dated 20-04-2006 was crucial in establishing the nature of the services provided. The CESTAT remitted the matter for fresh consideration by the Commissioner to verify the genuineness of the agreements and make a decision de novo.

The appellant argued before the High Court that the open remand by CESTAT was not justified, given the Commissioner's detailed findings on the genuineness and interpretation of the agreement dated 30-06-2006. The Revenue contended that the appellant had disclosed the agreement only in response to the show cause notice, making verification challenging. The High Court noted that CESTAT had been frequently passing remand orders without adjudicating on facts and law, which was not ideal as an Appellate Court. Consequently, the High Court set aside the impugned order and directed CESTAT to provide specific findings on the genuineness of the document alone after considering submissions from both parties, limiting the remand findings solely to this issue.

Therefore, the High Court's judgment addressed the procedural irregularities in the CESTAT's remand order and directed a specific examination of the genuineness of the agreement dated 30-06-2006, emphasizing the need for detailed findings on this aspect while retaining the Revenue's appeal on the file for further consideration.