Custom, Excise & Service Tax Tribunal
Cce & St, Jaipur-I vs A.S.Construction Company on 28 October, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
SINGLE MEMBER BENCH
Court No.III
Appeal No. ST/51955/2015-ST-SM
With ST/CO/52015/2015
(Arising out of OIA No.UDZ-EXCUS-000-APP-192-20-15 dt.18.02.15 passed by the CCE(Appeals), Jaipur)
Date of Hearing: 15.10.2015
Date of Order: 28.10.2015
For approval & Signature:
Honble Smt.Sulekha Beevi C.S., Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordships wish to see the fair copy of the order?
seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
CCE & ST, Jaipur-I Appellant
Vs.
A.S.Construction Company Respondent
Appearance:
Present for the Appellant: Shri S.Nunthuk, AR Present for the Respondent: Dr.G.k.Sarkar, Advocate Coram: Honble Smt.Sulekha Beevi C.S., Member (Judicial) Final Order No.53259/2015 Per: Sulekha Beevi C.S. This appeal is filed by Revenue challenging the stay modification order passed by Commissioner (Appeals) on 18.2.2015 modifying the stay order passed on 29.10.2013.
2. The respondents who are engaged in providing construction services, being aggrieved by Order-in-Original dated 13.6.2012 filed an appeal before the Commissioner (Appeals) alongwith an application for stay. The then Commissioner (Appeals) heard and disposed the application for stay vide stay order dated 29.10.2013 directing the respondents to deposit the entire amount of service tax of Rs.30,24,642/- as pre-deposit within a period of three weeks. The respondent did not comply with the order. They filed an application dated 13.11.2013 seeking modification of stay order. This application was heard and disposed vide impugned order dated 18.2.2015 by which the Commissioner (Appeals) modified the earlier stay order and granted full waiver of pre-deposit.
3. In this appeal, the Revenue challenges this modification of stay order on the ground that (1) there is no provision in the Finance Act, 1994, which gives power to Commissioner (Appeals) to review his own order (2) That in M/s.Girnar Transformer (P) Ltd. vs. CCE, Kanpur -2014 (35) STR 97 (Tri.-Del.) the CESTAT has held that Commissioner (Appeals) has no power to review his own decision; he may entertain an application for rectification/modification of a pre-deposit order, in case of an error apparent on the face of record. That the impugned order is not passed in the nature of rectification of mistake but is in the nature of review of his own decision. That there is no mistake apparent in the stay order dated 29.10.2013.
4. Per contra, the learned counsel appearing for the respondent reiterated the contentions raised in the cross objections filed. He submitted that in the earlier stay order the Commissioner (Appeals) erred in appreciating the facts of the case. That the judgement laid in Macro Marvel Project Ltd. vs. CST, Chennai, 2008 (12) STR 603 (Tri.-Chennai) which was followed in the case of A.S.Sikarwar vs. CCE, Indore, Final Order No.ST/A/375/2012-Cu (DB) dated 20.4.2012 were not followed by the Commissioner (Appeals) on wrong appreciation of facts. This being an error apparent on the face of record, the respondents moved an application for modification of the stay order. That the same was allowed after taking into consideration of the entirety of facts and judicial dispositions. That in M/s.Girnar Transformers case, it has been held by the Tribunal that Commissioner (Appeals) has power to rectify mistake in regard to pre-deposit order.
5. I have heard the rival submissions and perused the records carefully.
6. As the relevant provisions of law do not provide for an appeal against an interim order passed by the Commissioner (Appeals) this Bench entertained a doubt whether this appeal filed by the Revenue against the interim order/stay order passed by Commissioner (Appeals) is maintainable or not. As stated, the relevant provisions of law do not provide that an appeal would lie before the Tribunal against an interim order of pre-deposit passed by the Commissioner (Appeals). The observation of CESTAT in the case of M/s.Girnar Transformer Ltd. (supra) would give a clear picture on this issue. In para 10 of the said judgement, the Tribunal has observed as under:-
10.?On a primary analysis of the provisions of Sections 85 and 86 of the Act it appears that an appeal to this Tribunal lies only against a final order passed by the Commissioner (Appeals) in an appeal preferred to him; and not against an (interlocutory) order of pre-deposit passed by that authority, in exercise of discretion under the first proviso to Section 35F of the 1944 Act. Since it is the settled legal principle that an appellate remedy is a creature of the statute; and availability of an inherent appellate remedy shall not be assumed; and requires to be legislatively provided, it is legitimate to infer that no appellate recourse to this Tribunal is open to an assessee against an (interlocutory) order of pre-deposit passed by the Commissioner (Appeals), since such an order would not be an order, which by itself disposes of appeal on merits. The appropriate remedy available to an assessee aggrieved by an order of pre-deposit passed by the Commissioner (Appeals) would therefore be judicial review under Article 226 or a supervisory curative recourse under Article 227, of the Constitution. Precedents however appear to belie this empirical assumption.
7. The Tribunal analyzed in depth, various judgements and laid, interalia, the following principles:-
(a)
(b) The Commissioner (Appeals) has the power, authority an jurisdiction to entertain an application for rectification or modification of an order of pre-deposit/stay passed by that authority. While no power is specifically conferred on the Commissioner (Appeals) either under sections 35 or 35A of the 1944 Act, to review his own decision; and though the provisions of section 35C (2) of this Act confer the power (to rectify any mistake apparent on the record) only on this Tribunal, the Commissioner (Appeals) may entertain, an application for rectification/modification of a pre-deposit order, but only for rectification of an error on the face of the record;
(e) In view of the decision of the Punjab and Haryana High Court in Surya Pharmaceutical Ltd. (supra), since an order of pre-deposit passed by the appellate Commissioner, in exercise of discretion under section 35F of the 1994 Act amounts to an order passed under the generality of the appellate jurisdiction under section 35, an appeal lies to this Tribunal against such order as well, apart from an appeal against the final order dismissing an appeal for failure of pre-deposit;
8. From the above, an appeal against a modification of pre-deposit order would fall under the generality of the appellate jurisdiction and an appeal would lie to the Tribunal. Following the principle laid in M/s.Girnar Transformers Ltd. case, I hold that this appeal filed by Revenue is maintainable.
9. The next issue to be addressed is whether the impugned order is sustainable or not. The strong argument of the Revenue is that there is no error apparent on the face of record in the stay order dated 29.10.2013 and by modifying this order granting full waiver of pre-deposit, the commissioner (Appeals) has reviewed his order, thus acting beyond his authority. Refuting the contentions, it is the case of the respondent that the facts stated in the stay order dated 29.10.2013 was not at all correct and therefore they filed application for rectification/modification. The copy of the application for modification of stay order filed by the respondent before the Commissioner (Appeals) is furnished along with the cross objections. On perusal of this application, it is seen that the respondents have given a detailed narration of facts explaining their view how the judgement laid in cases of Macro Marvel case and A.S.Sikarwar are applicable to their case. It is also pointed out that the said judgements have been wrongly distinguished by the Commissioner (Appeals). It is seen from the application that the basic contention of the respondents is that they are engaged in construction of independent residential buildings, which were not connected in plinth, had separate boundary wall, entrance and separate electricity and water connection and thus will not fall into the category of construction of residential complex coming under section 65 (30a) read with section 65 (91a) an section 65 (105) (zzzh) of the Finance Act, 1994. In the stay order dated 29.10.2013, the Commissioner (Appeals) noted that these premises have common facilities/services like common water supply, park, parking space, community hall, etc. and are situated in close proximity in a common area. The Commissioner (Appeals) concluded that therefore, if in a common area, there are more than 12 independent houses having some common facilities, it would qualify to be called a residential complex and liable to service tax. If the argument of the respondents, that the houses though constructed close to each other are not provided with common facilities, is to be accepted then in my view, there is an error of fact apparent on the face of the stay order dated 29.10.2013. Being a question of fact, I do not wish to speak about it more than what is necessary at this stage as the appeal is pending adjudication before the Commissioner (Appeals). However, it has to be stated that this error pointed out by respondents error is manifest and does not require any long drawn process to show its incorrectness. In such circumstances an application for modification of the order is maintainable. Moreover, the Commissioner (Appeals) while directing to deposit the entire amount, distinguished the judgement laid in Macro Marvel and A.S.Sikarwar cases basing upon this conclusion arrived that there are common facilities. In the application for modification, the respondents have also pointed out yet another judgement rendered in the case of Inderjeet Singh Jadon in Final Order No.ST/A/50796/2014-CU (DB) dated 27.2.2014. Therefore, by the impugned order, in my opinion, the Commissioner (Appeals) has not exercised power of review, but has merely rectified a mistake apparent from the record, which was within his power as laid in the case of M/s.Girnar Transformers Ltd.
10. It is made clear that the observations made herein regarding the contentions raised by the respondents are confined to this order. It is open for the Commissioner (Appeals) to decide the appeal on its own merits. In view, thereof, considering the facts and circumstances presented, the Commissioner (Appeals) is directed to decide the appeal as expeditiously as possible, preferably within a period of six months from the date of order. The waiver of pre-deposit to the extent directed in stay- modification order dated 18.2.2015 will be valid until the final disposal of the appeal by the Commissioner (Appeals).
11. The appeal is dismissed in the above terms. The cross objections are also disposed accordingly.
(pronounced in the open court on 28.10.2015) (Sulekha Beevi C.S.) Member (Judicial) mk 7