2018 (9) TMI 1441 - AT - Service Tax

Rectification of Mistake - granting cum-tax benefit and thus to re-quantify the demand by treating the entire consideration as cum-tax - whether the same falls within the ambit of Rectification of Mistake or not? - Held that - Section 74 of the Finance Act only authorizes the adjudicating authority to rectify such mistakes, which are apparent on the face of the records. The assessee s claim of cum-duty cannot be considered to be a mistake apparent on the face of the records. The said issue is a legal issue and the appellant should have claimed the same at the time of adjudication by the original adjudicating authority or thereafter in their appeal before Commissioner(Appeals). The appellant having not done that and having allowed Commissioner(Appeals) s order to attain finality, cannot now raise the said legal issue before the original adjudicating authority, by way of filing a Rectification of Mistake application - ROM Application dismissed.

Summary

Issues:
1. Rectification of Mistake application under Section 74 of the Finance Act, 1994 for cum-tax benefit.

Analysis:
The judgment pertains to a case where a demand of Service Tax under the category of "Renting of Immovable Property" was confirmed by the Joint Commissioner, which was later upheld by the Commissioner(Appeals). The appellant subsequently filed a Rectification of Mistake application seeking cum-tax benefit to re-quantify the demand. The Additional Commissioner rejected the application, stating that the claim was not a mistake apparent on the face of the records. The appellant challenged this rejection before Commissioner(Appeals), who also dismissed the appeal.

The Tribunal noted that the appellant did not raise the cum-tax benefit claim during the initial adjudication process or in the subsequent appeal before the Commissioner(Appeals). The Tribunal emphasized that Section 74 of the Finance Act allows rectification of mistakes that are apparent on the face of the records. The claim for cum-tax benefit was deemed a legal issue and not a mistake evident from the records. The Tribunal held that since the appellant did not raise this issue earlier and allowed the Commissioner(Appeals)'s order to attain finality, they could not now introduce the legal issue through a Rectification of Mistake application. Consequently, the Tribunal rejected the appeal filed by the appellant.

In summary, the Tribunal upheld the lower authorities' decision that the Rectification of Mistake application seeking cum-tax benefit was not maintainable as the claim was not a mistake apparent on the face of the records. The appellant's failure to raise the issue during the initial adjudication process or appeal precluded them from introducing it at a later stage. The judgment emphasizes the importance of timely raising all relevant legal issues during the adjudication process to avoid procedural challenges at a later stage.