2018 (12) TMI 1290 - HC - Central Excise

Aggrieved party - Whether in the facts and circumstances of the case and in law, the CESTAT was correct in dismissing the appeal filed by the Appellant on the ground that the Appellant is not aggrieved party but it is IIMT which is the aggrieved party when the Appellant is running the institute (IIMT) as part of its trust activities? Held that - Once the matter was sent back by the Commissioner (Appeals) and thereafter the OrderinOriginal was passed on 14.02.2014, then, the merits of both orders are before the Tribunal. The Tribunal refrains from going into the merits of the matter and rests its finding on a technical issue of maintainability. When the Tribunal was aware that it s bounden duty was to scrutinize the orders brought before it on merits and adjudicate the issue of taxibility, then, it should not have indulged itself and wasted its time on such technical matters which do not go to the root of the case at all. Both appeals are restored to the file of the Tribunal for adjudication on merits and in accordance with law - appeal allowed.

Summary

Issues:
1. Whether the Tribunal was correct in dismissing the Service Tax Appeal filed by the Appellant on the ground of lack of standing?
2. Whether the Tribunal erred in not adjudicating the appeal on merits despite the Trust being the entity liable to pay the tax?

Analysis:
1. The High Court considered whether the Tribunal's dismissal of the Service Tax Appeal by the Appellant was justified due to the Appellant not being the aggrieved party, as the liability fell on the Trust managing the education institute. The Court noted that the Tribunal's decision was based on technical grounds and failed to recognize the inclusive definition of 'assessee,' which includes entities liable to pay tax. The Trust, as the entity bearing the tax burden, should have been allowed to challenge the tax imposition. The Court found the Tribunal's approach to be hyper-technical and directed the matter back to the Tribunal for adjudication on merits.

2. The Court further examined the Tribunal's failure to address the appeal on its merits despite the Trust being the liable entity. The Trust, registered as a public charitable trust under the Bombay Public Trust Act, was managing educational institutes, including IIMT. The Court emphasized that since the Trust bore the tax liability and had previously been allowed to prosecute proceedings, the Tribunal's avoidance of adjudicating the matter on merits was unjustified. The Court quashed the Tribunal's order, restoring both appeals to the Tribunal for proper adjudication on merits without entertaining preliminary objections on maintainability, emphasizing the Tribunal's duty to decide the appeals in accordance with the law.

In conclusion, the High Court found in favor of the Appellant, allowing both appeals and setting aside the Tribunal's order. The Court emphasized the importance of adjudicating on merits rather than technicalities and directed the Tribunal to proceed with the appeals in accordance with the law, without entertaining preliminary objections on maintainability.