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TMI Blog2010 (4) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... following the due process of law, the same was bad in law thus setting aside the order. Held that- order dated 9.1.2006 passed without complying with natural justice not sustainable. Competent authority directed to pass fresh order after providing hearing opportunity. - 52 of 2007 - - - Dated:- 16-4-2010 - K.L. Manjunath and B.V. Nagarathna, JJ. Shri C. Shashikantha, Advocate, for the Appellant. Shri K.S. Ravi Shankar, Advocate, for the Respondent. [Judgment per : B.V. Nagarathna, J.]. - The revenue has preferred this appeal by challenging the order dated 28-11-2006 passed in Final Order No. 1947/2006 [2007 (5) S.T.R. 410 (Tribunal)] by CESTAT at Bangalore. 2. The facts leading to the filing of this appeal are that the respondent which is a company engaged in Door-to-Door International Courier Service had sought a clarification from the office of the Commissioner of Service Tax by its letters dated 20-3-2002 and 8-10-2004 regarding leviability of service tax in respect of Door-to-Door International Courier Service. The then Commissioner took a view that the said service did not constitute a taxable service and accordingly, a communication was issued to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in view of the circular dated 31-10-1996, the service rendered by the assessee is a taxable service and therefore, the tribunal ought to have appreciated as to under what circumstances, the initial letter dated 23-12-2004 was held to be void ab initio and a fresh letter dated 9-1-2006 was issued and that the same could not be a subject matter of appeal before the CESTAT. He, therefore, submitted that the substantial questions of law raised in this appeal have to be answered in favour of the revenue by setting aside the order of the Tribunal. 5. Per contra, it is submitted on behalf of the respondent that the appeal filed before the Tribunal and the same was maintainable in view of the procedure envisaged under Section 84 of the Finance Act, 1994 was not complied with by the Department before passing the order dated 9-1-2006 and that the order impugned before the tribunal was in fact an order under Section 84 of the said Act and not just a letter or a communication. That the order makes it clear that the entire issue has been decided behind the back of the respondent-assessee after initially holding that the service rendered by the respondent was not subject to service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OFFICE OF THE COMMISSIONER OF SERVICE TAX : 16/1, S.P. COMPLEX, LALBAGH ROAD : BANGALORE-560 027. C.NO. IV/16/38/05 S.T. Tech. dated : 9-1-2006 To M/s. TNT India Pvt Ltd., 82/1, Richmond Road, Bangalore-560025 Sirs, Sub : Levy of Service Tax on Door-to-Door International Courier Service-reg. *** Please refer to this office letter of even No. dated 23-12-2004, on the above subject. This issue has been re-examined in accordance with legal provisions. 2. In the door-to-door international Courier Service, though the documents, goods or articles are delivered abroad, the service is rendered to a person located or resident in India and the charges towards service are paid by the person located or resident in India. In view of the above, the subject service is leviable to Service Tax. The correctness of position of law indicated above has been confirmed by the Ministry of Finance, Government of India in Circular F. No. 341/43/96-TRU dated 31-10-1996. 3. The clarification issued in this office letter of even no. dated 23-12-2004 is contrary to the legal position stated above and accordingly, the said clarification is ab in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 23-12-2004 was void ab initio. The letter dated 23-12-2004 reads as follows : OFFICE OF THE COMMISSIONER OF SERVICE TAX SERVICE TAX COMMISSIONERATE : 16/1, S.P.COMPLEX : LALBAGHROAD : BANGALORE-560 027 C. NO. IV/16/38/2004 S.T. Tech Date : 23-12-2004 To M/s. TNT India Private Limited 82/1, Richmond Road BANGALORE-560025. Sir, Subject : - Clarification on applicability of Service Tax in respect of Door-to-Door International Freight. Reg. Please refer to your letter Ref. No. BLH/LEG /ST/02/63 dated 20-3-2004 and 8-10-2004, on the above subject. 2. The activity mentioned at Sl. No. 2, of your letter referred above does not appear to come under the preview of Service Tax. Yours faithfully Sd/- (V.P.C. RAO) ADDITIONAL COMMISSIONER 10. The said clarification was pursuant to letters dated 20-3-2002 and 8-10-2004 written by the respondent-assessee. The Commissioner of Service Tax and the Commissioner of Central Excise respectively. The letter dated 8-10-2004 reads as follows : TNT India Private Limited October 8, 2004 Registered Office 82/1, Richmond Road Shri Subhash Chande ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner Central Excise and Service Tax that in view of Board's Circular F.No. 341/43/96-TRU, dated 31-10-1996, the decision of the earlier Commissioner, communicated on 23-12-2004 was ab initio void, being contrary to the said circular of the board and further expressed as follows : While the communication dated 23-12-2004 is based on the decision taken by the Commissioner, the same cannot be construed as an adjudication order/appealable order. Hon'ble CESTAT in the case reported in 2003 (151) E.L.T. 661 (T) held that letter/communication is not an adjudication order. Since the letter dated 23-12-2004 or for that matter, the decision on the note sheet as endorsed by the Commissioner cannot be considered as an order / appealable order, provisions of Section 74 and Section 86 of Finance Act, 1994 cannot be invoked. While Section 74 of the Act, 1994 inter alia mentions about order passed under the provisions of the Chapter (which refers to adjudication order), Section 86 of the Act, 1994, refers to any order passed by the Commissioner under Section 73 or Section 83A or Section 84 of the Act. The present case does not fall within the purview of Section 74 / Section 86 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On 9-1-2006, itself the Commissioner wrote to the respondent-assessee which is extracted supra. The salient points of the communication dated 9-1-2006 are that : (i) Subsequent to the letter dated 23-12-2004 issued by the department to the respondent-assessee, the matter was re-examined, (ii) In the re-examination it was decided that International Door-to-Door Courier Service is subject to levy of service tax. (iii) That the office letter dated 23-12-2006 issued to the respondent-assessee is ab initio void and hence it is nullified. (iv) That the respondent-assessee was requested to discharge the service tax liability for the relevant period immediately. (v) That a copy of the said letter was sent to the Assistant Commissioner of Service Tax Division (2) for information and necessary action and with a direction to issue a show-cause notice to the respondent-assessee for recovery of service tax and interest and to report the action taken in this regard to the Commissioner's Office within seven days from the date of receipt of the said letter. The said aspect was not made known to the assessee. 14. On a comparison of the letter dated 9-1-2006 produced by the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 84 direct the Commissioner of Central Excise to appeal to the Appellate Tribunal against the order. [PROVIDED that where the Committee of Chief Commissioners of Central Excise differs in its opinion against the order of the Commissioner of Central Excise, it shall state the point or points on which it differs and make a reference to the Board which shall, after considering the facts of the order, if is of the opinion that the order passed by the Commissioner of Central Excise is not legal or proper, direct the Commissioner of Central Excise to appeal to the Appellate Tribunal against the order.] Under the said section, an appeal is maintainable before the appellate Tribunal if an order is passed under the sections mentioned. Therefore, if an order is passed under Section 73 or 83(a) or 84 or 85 an appeal can be filed by an assessee aggrieved by such an order before the Appellate Tribunal. Hence, it has to be ascertained as to whether the order dated 9-1-2006 is one under Sections 73, 83(a), 84 or 85 of the Finance Act, 1994. Section 73 deals with recovery of service tax not levied or paid or short levied or short paid or erroneously refunded while Section 83(a) deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of this Chapter pass such order thereon as he thinks fit. (2) No order which is prejudicial to the assessee shall be passed under this section unless the assessee has been given an opportunity of being heard. (3) The [Commissioner] of Central Excise shall communicate the order passed by him under sub-section (1) to the assessee, the {such adjudicating authority] and the Board. (4) No order under this section shall be passed by the [Commissioner] of Central Excise in respect of any issue if an appeal against such issue is pending before the [Commissioner] of Central Excise (Appeals). (5) No order under this section shall be passed after the expiry of two years from the date on which the order sought to be revised has been passed. 16. If the communication dated 9-1-2006 is construed to be an order under Section 73 of the said Act, then in that case show-cause notice had to be issued to the respondent-assessee as a pre-requisite before demanding payment of service tax by specifying the amount in the show-cause notice before passing the order dated 9-1-2006. Whereas, if it is to be construed as one under Section 84 of the Act, then in such a case, the procedur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority subordinate to him can pass any decision or order and make such enquiry or cause such enquiry to be made and pass such order as he thinks fit that no order which is prejudicial to the assessee can be passed under Section 84 unless the assessee has been given an opportunity of being heard. Therefore any exercise of power under Section 84 of the Finance Act, 1994 is an order within the meaning of the said Act. 18. Having regard to the fact that in the instant case, the Additional Commissioner on 23-12-2004 had held that the activity of the assessee does not come within the purview of service tax, it can be construed that the said order made on 23-12-2004 by the Additional Commissioner is by an adjudicating authority subordinate to the Commissioner of Central Excise, having regard to the definition of Central Excise Officer under Section 2(a) of the Central Excise Act, 1944. Therefore, the Commissioner of Central Excise had to give an opportunity of being heard to the respondent-assessee before passing an order as per Section 84. As already noted, without giving an opportunity to the assessee, the order dated 23-1-2004 was reversed and further the order dated 23-12-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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