Calcutta High Court (Appellete Side)
M/S. Atindra Construction(P) Ltd. & Ors vs The Principal Commissioner Of Service ... on 16 July, 2019
Author: I.P. Mukerji
Bench: I.P. Mukerji
08 16.07.19
M.A.T. 326 of 2017
M/s. Atindra Construction(P) Ltd. & Ors.
Vs.
The Principal Commissioner of Service Tax, Audit Commissionerate & Ors.
Mr. Sudip Kumar
Mr. S.K. Ghosh
Ms. S. Sinha .... For the Appellants.
Mr. Somnath Ganguly
Ms. Manasi Mukherjee ..... For the Respondents.
Re: C.A.N. 2360 of 2017 This is an appeal from a judgement and order dated 6th March, 2017 made in a writ application together with a connected application (W.P. 12307(W) of 2016 with C.A.N. 818 of 2017 M/s. Atindra Construction Pvt. Ltd. Vs. The Principal Commissioner of Service Tax, Audit Commissionerate, Kolkata & Ors.), by a learned single judge of this court, dismissing the writ application.
Hence this appeal.
We are told that this appeal was heard for S.D. several days before the bench taking up these matters before us but for some unavoidable reasons the judgement could not be delivered.
The point involved in this appeal is extremely short.
The question is whether the show cause notice dated 19th April, 2016 was without jurisdiction.
The appellant urges two principal points. The first is that the show cause notice, was issued without jurisdiction by the Principal Commissioner Service Tax Audit Commissionerate, Kolkata. Secondly, he says that the adjudicating authority referred to in paragraph 3 of the show cause notice is the Commissioner Service Tax-II Commissionerate, Kendriya Utpad Shulka Bhawan, 180 Shantipally, Rajdanga Main Road, Kolkata-700 107. He had no jurisdiction to hear the show cause notice.
By this show cause notice a substantial amount of service tax, interest and penalty under various heads of charge was demanded.
By the Finance Act, 1994 as amended by the Finance Act, 2013 service tax was levied, charged and collected. The charging section was Section 66. By Section 83, several provisions of the Central Excise Act, 1944 were made applicable to service tax matters. Section 83A of the said Act of 1994 enacted as follows:-
'83A. 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' Paragraph 5.1, 5.2 and 5.3 of the Circular NO.
985/09/2014-CX dated 22.09.2014 placed by Ms. Mukherjee for the respondents are as follows:-
'5.1. Monitoring Committee Meeting (MCM) should be convened by Audit Commissionerate, for which the Executive Commissioner or his representative will be invited to attend. The decision with regard to settlement of an audit objections after recovery of all dues or dropping of the unsustainable audit objections shall vest with the Audit Commissioner. Approved audit objections including those in which show cause notices are proposed to be issued should be conveyed to the Executive Commissioner in the form of Minutes of the MCMs who shall respond to these objections conveying his agreement/disagreement within 15 days of the receipt of the minutes of the MCM.
5.2 on points of difference, further consultations may be held for a maximum period of 15 days. In case the difference persists, the final decision to issue show cause notice rests with the Audit Commissioner.
5.3 Audit Commissionerate shall issue the show cause notice shall be answerable to and adjudicated by the Executive Commissioner or the subordinate officers of the Executive Commissionerate as per the adjudication limits prescribed the Board. Audit function will end with the issuance of show cause notice and further action including adjudication and follow-up shall be the responsibility of Executive Commissioner.' Learned counsel for the respondents submitted that under the above circular the Principal Commissioner Service Tax Audit Commissionerate rightly issued the show cause notice in terms of the said circular by the 'Executive Commissioner'. Furthermore, it is to be adjudicated by the Commissioner as specified in paragraph 3 of the show cause notice.
In those circumstances, the stipulation in paragraph 4 of the said show cause notice that it could be adjudicated by the Commissioner Service Tax-II Commissionerate was also in order.
Therefore, the objection of the appellant as to jurisdiction has no substance at all in our opinion. The case needs to be adjudicated on merits. However, we find from the records that in the absence of an interim order, the Service Tax Audit Commissionerate, Kolkata has on 17th March, 2017 adjudicated upon the show cause by passing an order. The appellants did not participate in it, because of the pendency of the appeal.
To do complete justice between the parties, we direct that the show cause notice is to be adjudicated on merits afresh. The adjudication made on 17th March, 2017 is set aside. The Service Audit Commissionerate, Kolkata is directed to make a fresh adjudication on the self-same show cause notice on merits by giving the appellant an opportunity of being heard by a reasoned order to be made and published and communicated within three months of communication of this order.
The appeal MAT 326 of 2017 and CAN 2360 of 2017 are disposed of by this order.
The impugned judgement and order of the learned single judge dated 6th March, 2017 is modified to the above extent.
(I.P. Mukerji, J.) (Md. Nizamuddin, J.)