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TMI Blog2013 (7) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 83A is to provide powers of adjudication in service tax cases - power of determination of service tax and interest liability in addition to the power of imposition of penalty - the said section cannot be interpreted in a narrow sense to restrict the power to imposition of penalty alone- section 83A does not read as “only penalty” or “solely penalty” – as decided in UOI vs. Tata Iron & Steel Co. Ltd.(1975 (12) TMI 79 - SUPREME COURT OF INDIA). The next issue for consideration is whether the Chief CCE has the power to assign adjudication of specific cases to any other officer within his jurisdiction - The CBE&C vide the Notification No. 6/2009-ST dated 30.1.2009 issued under Section 37A of the Central Excise Act, as made applicable to service tax by Section 83 of the Finance Act, 1994, read with the provisions of Section 83A and Notification No. 16/07-ST dated 19.4.2007 has delegated the power of assigning adjudication of cases to the Chief Commissioner of Central Excise within his jurisdiction – thus the Chief CCE can assign adjudication of service tax cases to any CEO within his jurisdiction. - ST/112/09; ST/117, 384, 60, 446, 130, 407, 445, 429, 177, 366, 08, 443,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rector General has been appointed as central Excise office . As per Rule 3 of the Service Tax Rules, 1994, the Central Board of Excise and Customs (CBEC may appoint such Central Excise officer for exercising the powers under Chapter V of the Finance Act within such local limits as it may assign to them as also specify the taxable service in relation to which any such Central Excise Office shall exercise his powers. 3.1 A plain reading of the above rule indicates that the CBEC needs to appoint Central Excise Officer' who shall exercise powers under the Finance Act, 1994 within the territorial jurisdiction specified therein as also for the taxable services specified. It is the contention of the learned Counsel that no such notification or appointment order has been issued by the CBEC appointing Commissioner of Service Tax, Mumbai as the Central Excise Officer in terms of Rule 3 of the Service Tax Rules, 1994, and, therefore, the show-cause notices issued by the Commissioner of Service Tax, Mumbai, is void ab initio inasmuch as he does not have any jurisdiction. As per Rule 3 of Central Excise Rules, 1944, CBEC can appoint such person as it thinks fit to be a Central Excise Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being investigated by DGCEI in the case of M/s First Flight Courier Ltd. and M/s Tata Consultancy Services Ltd. 3.3 The Order No. 4/4/2004 dated 18.5.2004 relied upon by the Revenue is not for the purpose of levy and collection of Service Tax. The said order merely notifies creation of six exclusive Service Tax Commissionerates along with their territorial jurisdiction. The said order has been issued for creating six exclusive Service Tax Commissionerates only and not for appointing Commissioner of Service Tax as Central Excise Officer in terms of Rule 3 of the Service Tax Rule, 1994. 3.4 The argument of the Revenue that the term Commissioner' occurring in the main paragraph of the order dated 18-5-04 should be read as Commissioner of Central Excise' is not acceptable for the reason that while interpreting a provision, regard must be had to the clear meaning of the words and there is no room for any intendment. Therefore, the Courts and the appellate authorities can not read words into the provision/statute/notification which the legislative body in its wisdom has deliberately not incorporated. Further, the said order no where refers to Commissioner of Central Excise. Besides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the Finance Act, 1994. In terms of Notification No.6/2009, the Central Government has directed that the powers exercisable by the CBEC under Section 83A read with Notification No.16/2007-ST dated 19.4.2007 shall also be exercised by the Chief Commissioner of Central Excise for the purpose of assigning the adjudication of cases under the provisions of Finance Act, 1994 or the rules made there under within the jurisdiction. 3.5 It is contention of the learned Counsel that Section 83A of the Finance Act provides for adjudication of penalty only. Therefore, adjudication of service tax liability by the Commissioner of Central Excise, thane-I pursuant to the above Notification is bad and void. Once the service tax demand does not survive, penalty cannot stand. Further, Notification No.16/2007-ST has also been issued under Section 83A of the Finance Act, 1994, 1994 whereby the CBE C has appointed the Commissioner of Central Excised having jurisdiction throughout the territory of India for investigation and adjudication of cases as may be assigned by the Board. This notification also provides for adjudication of penalty only. In any case, Notification No. 16/2007 dated 19.4.2007 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of Chapter V of the Finance Act, 1994 and Chief Commissioner of Central Excise, Mumbai cannot delegate the powers of adjudication for determination of Service Tax and interest liability and, therefore, exercise of such power without authority is bad in law and therefore, the orders issued merit to be set aside. 4. The learned Special Consultant appearing for the Revenue strongly refutes the contentions made by the learned Counsel for the applicants. He submits that Section 2(b) of the Central Excise Act, 1944 defines the term Central Excise Officer''. Rule 3 of Service Tax Rules, 1994 provides for appointment of such Central Excise Officers as CBE C thinks fit for exercising the powers under Chapter V of the Act within such local limits as it may assign to them and also specify the taxable services in relation to which such powers may be exercised. It is in accordance with these provisions of law, CBE C has issued Order No.4/2/2004-ST dated 18.5.2004 regarding appointment of officers for assessment and collection of Service Tax. A plain reading of the said order indicates that there are two parts to the said order. By the first part of the order, the CNE C has notified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction. Since Chief Commissioner of Central Excise, Mumbai-I has exercised this power vide order No.1/2009-ST dated 10.2.2009 and assigned the case to adjudicate by Commissioner of Central Excise, Thane-I who is working under him, the assigning of adjudication by the Chief Commissioner is in accordance with law and cannot be subjected to any legal challenge. 4.2 As regards the reliance placed by the appellant on Notification No. 26/06-ST and 30/06-ST, these notifications are not relevant to the issue involved in the present case. Vide Notification NO. 6/2009-ST, the power of the CBE C has been delegated to the Chief Commissioner of Central Excise for the purpose of assigning of cases for adjudication. Once the power is exercised in accordance with law, there cannot be any challenge to the same. 4.3 As regard the contention of the applicants that Section83A confers power of adjudication with respect to only penalty, this contention ignores the fact that Notification No.16/07-ST dated 19.4.2007 refers not only to Section 82A of the Finance Act, 1994 but also to Rule 3 of the Service Tax Rules, 1994 and, therefore, Notification No. 6/2009-ST dated 30.14.2009 has to be read al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Raigad Commissionerate 2 Commissionerate of Service Tax, Delhi Central Excise Zone of Delhi except Commissionerates of Panchkula and Rohtak 3 Commissionerate of Service Tax, Chennai Commissionerate of Central Excise, Chennai-I II 4 Commissionerate of Service Tax, Kolkata Central Excise Zone of Kolkata except Bolpur, Siliguri and Haldia Commissionerate 5 Commissionerate of Service Tax, Bangalore Central Excise Zone of Bangalore 6 Commissionerate of Service Tax, Ahmedabad Commissioinerate of Central Excise, Ahmedabad-I II 2. The officers mentioned in the Column 2 above will be reporting to the jurisdictional Chief Commissioners in all matters relating to Service Tax except for the officer mentioned at Sr. No.1 who would be reporting to Chief Commissioner, Mumbai-I. 3. The earlier Order No. 1/1/94-Service Tax Rules (3) dated 29.9.1994 and Order No.2/2/94-Service Tax Rules (3) dated 4.7.1994 as amended by Order No. 1/1/98-STR(3) dated 7.10.1998 and Order No. 3/1/2004-Service Tax Rules (3) dated 1 st March, 2004, stands amended as above. (Manish Mohan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Service Tax, is without any basis and accordingly, we reject the same. 5.5 The purpose and object of appointment of officer under Rule 3 of the Service Tax Rules, 1994, is to implement the provisions of Chapter V of the Finance Act, 1994 which relates to levy and collection of Service Tax. Therefore, the orders issued under the provisions of law have to be read and interpreted in a harmonious way so as to effectuate the purposes of the Act and to achieve its objective. Appointment of officer is only a machinery provision for achieving the object of the Act and in respect of such provisions, the executive has a wide attitude and flexibility as and flexibility as has been held in a large number of judicial pronouncements. The principle of strict construction does not apply in respect of machinery provisions. Therefore, even if there is some lacuna/shortcoming in the order issued, which we do not think exist in the present case, the said lacuna may be made good by the Court by reading words, if necessary, into the notification, so that the purpose and object of the notification is achieved. It is a well settled position in law that a construction that results in hardship, seriou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 3 of the Service Tax Rules, 1994, can issue the notice within his jurisdiction. Therefore, Commissioner of Service Tax, Mumbai who has been duly empowered with function of assessment and collection of Service Tax can legitimately issue notice for determination of service tax not levied/short levied/erroneously refunded and so o under Section 73. Since the Commissioner of Service Tax, Mumbai is a Central Excise Officer, he has the power to issue show-cause notice and adjudicate there upon whenever, there is a short levy or short payment, non-levy or non-payment or erroneous refund of Service Tax within his jurisdiction and we hold accordingly. 5.7 The ratio of the decision of the hon'ble Allahabad High Court in the case of Raghunath International Ltd. is relevant to the facts of the present case. In the said case, the jurisdictional of Additional Director General, Directorate of Central Intelligence was questioned in issuing a show cause notice for determination and recovery of central excise duty not paid along with interest thereon and for imposition of penalty. The argument advanced by the appellant therein was that the Addl. Director General was not appointed as Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion when there is inconsistency between two sections. The principles are as follows:- (1) It is the duty of the Court to avoid a head on clash between two sections of the Act and to construe the provisions which appear to be in conflict with each other in such a manner as to harmonize them. (2) The provisions of one section of a Statute can not be used to defeat the other provisions unless the Court, in spite of its efforts, finds its impossible to effect reconciliation between them. (3) It has to be borne in mind by all the Courts all the time that when there are two conflicting provisions in an Act, which cannot be reconciled with each other, they should be so interpreted that, if possible, effect should be given to both. This is the rule of harmonious construction.' (4) The Courts have also to keep in mind that an interpretation which reduces one of the provisions as dead letter' or useless lumber' is not harmonious construction. (5) To harmonise is not to destroy any statutory provision or to render it otiose." If we apply the above principles to the facts of the case before us, there is only one way to interpret the order dated 18-5-2004. That is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration is whether the powers of adjudication under Section 83A of the Finance Act, 1994 is confined only to adjudication of penalties or does it also cover adjudication of Service Tax liability and interest liability under Section 73 and 75 of the Finance Act, 1994, Section 83A reads as follows:- Where under this Chapter or the rules made thereunder any person is liable to a penalty, such penalty may be adjudged by the Central Excise Officer conferred with such power as the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), may, by notification in the Official Gazette, specify. 6.2 A perusal of Section 83A indicates that when any person is liable to any penalty, such penalty may be adjudged by the Central Excise Officer. The question is when is a person liable to penalty. The penal provisions in respect of Service Tax are governed by Sections 76,77 and 78 of the Finance Act, 1994. Section 76 provides for penalty for failure to pay Service Tax. Section 77 provides for imposition of penalty for contravention of Service Tax Rules and provisions of Chapter V of the Finance Act, 1994 for which the penalty is specified els ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allel processes of adjudication, one for demand of duty and other for confiscation and penalty. The ratio of the above decisions applies squarely to the facts of the present case and accordingly, we hold that the power to impose penalty necessarily includes in itself the power of determining of duty. 6.4 The Hon'ble High Court of Karnataka in the case of Doddabellapur Spinning Mills Ltd. Vs. Asstt. Collector of Central Excise -1992 (891) ELT 539 (Kar) examined the issue of a show-cause notice under Section 11A of the Central Excise Act, which also proposed to impose penalty and in the said case it was held as follows:- It was then further argued that the notice was defective as it was also a notice under Section 11A of the Act as it called upon the petitioner to make goods certain sum which was said to be the amount short levied for the specified period between 16 th June, 1984 and 5 th December, 1984. But then we do not find real substance in that argument, that the show-cause notice was without jurisdiction because it combined both penalty to be imposed under Section 33 as well as recover the short levy under Section 11A of the Act. As long as the notice make the person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty or solely penalty . Therefore, adopting the ratio of the above decision of the hon'ble apex court, section 83A can not be interpreted in a narrow sense so as to exclude determination of service tax liability or interest liability. Such an interpretation would destroy the section and would render it otiose. As observed earlier, such an interpretation is not permissible. A question arose before the hon'ble high court of Bombay in the case of Commissioner of Central Excise vs. J.K. Saboo [2008 (224) EL 34 (Bom)] wherein the maintainability of the appeal before the hon'ble high court was challenged in the context of section 35G of the Central Excise Act, 1944. In the said case, this Tribunal passed on order in the matter of determination of rate of duty and on such determination, penalty was imposed. The Hon'ble High Court held that the appeal against he Tribunal's order lies before the Supreme Court as penalty is only incidental to determination of the main question, namely, rate of duty . Applying the ratio of these decisions to the facts of the present case, we are of the considered view that section 83A envisages not only the determination of penalty but also determination of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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