Custom, Excise & Service Tax Tribunal
Whether Press Reporters May Be Allowed ... vs M/S. Mcleod Russel India Ltd on 12 July, 2012
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
EAST ZONAL BENCH: KOLKATA
1)MISCELLANEOUS APPLICATION NO.ST/M/377/11
2) SERVICE TAX APPEAL NO.ST/420/11
AND
3) CROSS OBJECTION NO.ST/CO/26/12
(ARISING OUT OF ORDER-IN-APPEAL NO.184-185/ST/KOL/2011 DATED 30.06.2011 PASSED BY COMMISSIONER OF CENTRAL EXCISE (APPEAL-I), KOLKATA READ WITH ORDER-IN-ORIGINAL NO.(R)/19/ST/DIV-I/2008 DATED 14.10.2008 PASSED BY ASSISTANT COMMISSIONER OF SERVICE TAX, DIVISION:I, KOLKATA)
FOR APPROVAL AND SIGNATURE OF
SHRI S.K.GAULE, HONBLE TECHNICAL MEMBER
DR. D.M.MISRA, HONBLE JUDICIAL MEMBER
1. Whether Press Reporters may be allowed to see :
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982 ?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not ?
3. Whether Their Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
Authorities ?
COMMISSIONER OF SERVICE TAX, KOLKATA
APPLICANT(S)/APPELLANT (S)
VERSUS
M/S. McLEOD RUSSEL INDIA LTD.
RESPONDENT (S)
APPEARANCE:
SHRI S.CHAKRABORTY, AR (ASSTT. COMMR.) FOR THE REVENUE;
NONE FOR THE RESPONDENT(S).
CORAM:
SHRI S.K.GAULE, HONBLE TECHNICAL MEMBER DR. D.M.MISRA, HONBLE JUDICIAL MEMBER Date of Hearing/Decision:12.07.2012 ORDER NO.
Per Shri S.K.Gaule Heard the learned AR for the Revenue. None present for the Respondent.
2. The Applicant/Appellant Commissioner has filed this Application for condonation of delay in filing the Appeal. In view of the reasons explained in the Application, the delay is condoned. After hearing the AR, we find that the Appeal itself can be disposed off at this stage. Therefore, after allowing the Miscellaneous Application for condonation of delay, we take up the Appeal for disposal.
3. The Appellant filed this Appeal against the Order-in-Appeal No. 184-185/ST/KOL/2011 dated 30.06.2011, whereby ld. Commissioner (Appeals) has remanded the case to the lower Adjudicating Authority.
3.1. Briefly stated facts of the case are that the Respondent filed a refund claim amounting to Rs.24,18,664/- and paid on specified services used for export of the goods in terms of Notification No.41/2007-ST dated 6.10.2007. The lower authority rejected the refund claim. The Respondent challenged the same before the ld. Commissioner (Appeals). The ld. Commissioner (Appeals) vide his Order dated 30.6.2011, remanded the matter to the lower Adjudicating Authority. The Revenue challenges the same. Hence the present Appeal.
4. The contention of the Revenue is that the power of remand by the ld. Commissioner (Appeals) has been taken away. The contention is that Section 85 of the Finance Act, 1994 corresponds to Sections 35 & 35A of Central Excise Act, 1944. The contention is that Section 35A(3) was amended w.e.f.11.5.2001 and Sub-section (3) of Section 35(A) of Finance Act, 1994 is reproduced below :
Section 35A(3) of Central Excise Act, 1944 -
The Commissioner (Appeals) shall, after making such further inquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against:
Provided that an order enhancing any penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order:
Provided further that where the Commissioner (Appeals) is of opinion that any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, no order requiring the appellant to pay any duty not levied or paid, short-levied or short-paid or erroneously refunded shall be passed unless the appellant is given notice within the time limit specified in Section 11A to show cause against the proposed order.
It is their contention that similar view had been taken by the Honble Supreme Court in the case of Mil India Ltd. Vs. Commr. of Central Excise, Noida reported in 2007 (210) ELT 188 (SC).
5. The Respondent also filed a Cross Objection on the ground that Section 35A (3) is not covered under Section 83 of Finance Act, 1994. The provision of Section 85(4) of Finance Act, 1994, is different from Section 35A(3) of Central Excise Act, 1994 and hence, the ld. Commissioner (Appeals) has power to remand the case.
6. We have carefully considered the submissions and perused the records. The ld. Commissioner (Appeals) has ordered in his impugned order as under :
4.1. I have carefully gone through the records of the case. The adjudicating authority has observed in his order that -
Regarding Scientific & Technical Consultancy Services and Technical Inspection & Certification Service received from M/s. Vimta Labs. the appellants did not submit invoices for quarter ending Dec.`07 and the written agreement between the buyer and the exporter requiring the exporter to test analyze the goods;
Regarding services received from M/s. Fracht Forwarding & Travels Pvt. Ltd. M/s. United Liner Agencies of India Pvt. Ltd. M/s. The Shipping Corporation of India Ltd. M/s. Rosemount Shipping (India) Pvt. Ltd. M/s. CMA CGM East & South India Pvt. Ltd., the services are other than the services specified in the notification and the appellants did not submit invoices of input services for period ending Dec.07;
Regarding services received from M/s. Container Corporation of India Ltd. invoices of input service for the period ending Dec,07 were not submitted. Further from the study of the invoices of previous period it revealed that the service provider is not registered under Transportation of Goods in Container by Rail service. So, the Service Tax, if at all paid for railway freight in any other account head. by service provider. has not gone into the account head of Sec. 65(l05)(zzp) of the Act;
Regarding services received from M/s. SGS India Pvt. Ltd neither invoices nor copy of written agreement between buyer and the exporter was submitted;
Regarding services received from l\/I/s. API. India (P) I.td. M/s. Maersk India Pvt. Ltd. M/s. NYK l.ine (India) Ltd. M/s. DHL Express India Ltd and M/s. TNT India Pvt. Ltd. no invoice was submitted. Further, Courier service was made eligible for refund vide notification no.3/2008-ST dated 19.02.08, hence not applicable for the quarter ending Dec,07;
Refund on GTA service was not placed on actual expenditure, but on a proportionate calculation. which is not admissible.
4.2. The appellants stated that as alleged some service providers registered under some head but rendered services under different other heads which are permitted under notification nos.4l/2007-ST and 3/2008-ST. The appellants cannot be penalized for this mistake of the service providers. They have referred to Circular No.112/6/2009-ST dated 12.3.09 in Sl. No.VII of which it is stated-
Notification No. 41/2007S.T. provides exemption by way of refund from specified taxable services used for export of goods. Granting refund to exporters on taxable services that he receives and uses for export do not require verification of registration certificate of the supplier of service. Therefore, refund should be granted in such cases, if otherwise in order. The procedural violations by the service provider need to be dealt separately, independent of the process of refund. On similar grounds they relied upon the following decisions: -
i) CCE vs. Dishman Pharma. & Chemicals Ltd [2011(21)STR-246(T)];
ii) CBAY Systems (India) Pvt. Ltd vs. CCE [2O11(21)STR688(T)].
They further relied on the decision in the case of SICA vs. CST [2008-I7-STT 114(T)], which held that any services which are rendered within the Port area would be classifiable under the service head of Port Services. In this context they also referred to Boards Circular No. 334/I/2010-TRU.
In support of their argument the appellants have submitted a copy of one Order-in-Original No.(R)/74/ST/Div-I/2009 dated 04.11.09 granting refund to them against export of goods using services received from the said same service providers for the quarter ending March,08, i.e.next quarter to the quarters under these appeals.
In view of above it is observed that the refunds are not deniable for the aspects discussed in the Orders-in-Original on the face of the Board`s Circulars and the decisions relied upon, except that the appellants did not submit the requisite documents before the sanctioning authority for examination. The appellants have not denied that they did not submit the documents stated above, which they have submitted here. I observe that they should submit the documents before the sanctioning authority for his examination and satisfaction before sanctioning the claims.
5. In view of above, I set aside the Orders-in-Original dated 14.10.08 and 06.10.08 and remand the matter to the Original authority to decide the matters afresh after considering the arguments of the appellants and documents to be submitted by them. Honble Supreme Court in the case of MIL India Ltd. (supra) held that the power of remand by the Ld. Commissioner (Appeals) has been taken away by amended Section 35A w.e.f. 11-5-2001 under the Finance Act, 1994. For the better appreciation whether the above decision is applicable to the instant case the relevant provisions of law are extracted hereunder :
Sub-section (3) of Section 35A before amendment The Commissioner (Appeals) may, after making such further inquiry as may be necessary, pass such order as he thinks fit confirming, modifying or annulling the decision or order appealed against, or may refer the case back to the adjudicating authority with such directions as he may think fit for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary. However, the situation has changed after the amendment carried out by Finance Act, 2001 came into effect from 11-5-2001. The changed legal position of sub-section (3) of Section 35A is as under :-
Sub-section (3) of Section 35A after amendment The Commissioner (Appeals) shall, after making such further inquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against.
From the above, it follows that the power of remand was explicitly provided under unamended sub-section (3) of Section 35A prior to 11-5-2001 and the same was taken away by the removal of the expression or may refer the case back to the adjudicating authority.
The Tribunal in the case of Commissioner of Central Excise, Noida v. Orient Craft Ltd. reported in 2011 (21) S.T.R. 302 (Tri.-Del.), held that :
It is settled law that the Commissioner (Appeals) dealing with the appeals under Central Excise Act, 1944 lacks jurisdiction to remand the matter to the Adjudicating Authority. The law provides that in case the Commissioner (Appeals) finds any infirmity in the order passed by the Adjudicating Authority or the order is found to be unsustainable, the Commissioner (Appeals) is certainly entitled to set aside such order and thereupon pass an appropriate order on merits by himself but not to remand the matter. Being so, Commissioner (Appeals) dealing with the appeals in relation to the service tax also is not empowered to remand the matter but he has to decide the matter by himself.
Thus, in case of service tax also the Commissioner (Appeals) is not empowered to remand the matter, he has to decide the matter by himself. Therefore the order of ld. Commissioner (Appeals) remanding the case to the lower authority, is not sustainable. However, We agree with the findings of the ld. Commissioner (Appeals). Therefore, the amendment to Section 35A would apply to the present case. However, we find that the above aspects are required to re-examined by the lower adjudicating authority. Accordingly, we remand the matter to the lower adjudicating authority for deciding the issue afresh. It is made clear that all the issues are kept open. Needless to say, a reasonable opportunity of hearing may be given to the respondents. Appeal is allowed by way of remand. Cross Objection filed by the respondent is also disposed off.
Dictated and pronounced in the open court.
Sd/- Sd/-
(D.M.MISRA) (S.K.GAULE)
JUDICIAL MEMBER TECHNICAL MEMBER
DUTTA/
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SERVICE TAX APPEAL NO.ST/420/11
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