Custom, Excise & Service Tax Tribunal
The Commissioner vs M/S Spandana Sphoorty Financial Ltd on 7 October, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench Single Member Bench Court I Appeal No. ST/1529 & 1530/2012 (Arising out of Order-in-Appeal No.26, 27 & 28/2012(H-IV)S.Tax, dated 24-02-2011 passed by Commissioner, C.CE&ST(Appeals-II), Hyderabad) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member (Judicial) 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 Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? The Commissioner C.CE&ST, Hyderabad-IV. ..Appellant(s) Vs. M/s Spandana Sphoorty Financial Ltd. ..Respondent(s)
Appearance Shri Nagraj Naik, AR for the Appellant.
Shri P.Dwarakanath, Advocate for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Date of Hearing: 07/10/2016 Date of Decision: 07/10/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.]
1. The above appeals are filed by the department challenging the order passed by the Commissioner(Appeals) which remanded the matter to the original adjudicating authority.
2. The Ld AR Shri Nagaraj Naik submitted that as per amended provisions of Section 35(A)(3) of Central Excise, Act, 1944 w.e.f. 11-05-2001, the powers of Commissioner(Appeals) to remand the matter has been taken away. Further, as per sub-section 5 of Section 85, it is provided that the Commissioner (Appeals) shall follow the procedure and exercise the same power, as that of the powers of Commissioner, Central Excise(Appeals) while disposing of appeals filed under Sec. 85 of Finance Act, 1994. He therefore, contended that the Commissioner (Appeals) has erred in remanding the appeals to the Original authority. The AR relied upon the judgment laid in M/s MIL India Ltd. Vs CCE Noida, 2007-(210)ELT-188(SC) and also Cochin International Airport Vs CCE Cochin 2011 (21)-STR-169 (Tri.Bang).
3. On behalf of the Respondent, the Ld consultant, Shri P.Dwarakanath, advanced his arguments, adverting to the sub-section 4, Section 85 of Finance Act, 1994. He submitted that, the said sub-section, does not curtail the power of the Commissioner (Appeals) to remand the matter to the original authority. He drew support from the judgment laid by the Hon'ble High Court of Gujarat in CST Vs Associated Hotels Ltd. 2015(37) STR-723(Guj) .
4. I have heard both sides.
5. The short issue to be considered is whether the Commissioner (Appeals), while decising a service tax appeal has powers to remand the matter to the adjudicating authority. Sub-section (40 of Section 85 of Finance Act, 1994 is reproduced hereunder for better appreciation of the issue.
(4) the Commissioner of Central Excise(Appeals) shall hear and determine the appeal and, subject to the provisions of this Chapter pass such orders as he thinks fit and such order may include an order enhancing the service tax, interest or penalty.
Provided that an order enhancing the service tax, interest or penalty shall not be made unless the person affected thereby has been given a reasonable opportunity to showing cause against such enhancement.
6. In the case of CST Vs Associated Hotels ltd. relied upon by the Ld. Consultant, appearing for respondent, the Hon'ble High Court has distinguished the decisions of the Hon'ble Apex Court laid in MIL Ltd. case (supra). After analyzing sub-section 4 of Section 85 of Finance Act, the Hon'ble High Court observed that the Commissioner (Appeals) can pass such order as it thinks fit including the orders for enhancing tax , interest, or penalty and that such powers would include the power to remand also. The relevant portion of the judgment is reproduced as under:
13.?Ms. Mandavia for the appellant however, would draw our attention to a later decision of the Supreme Court in the case of MIL India Ltd. v. Commissioner of C.Ex., Noida - 2007 (210) E.L.T. 188 (S.C.) in which in the context of the nature of order passed by the appellate Commissioner, whether it can be treated as an order of assessment, the Court observed that with effect from 11-5-2001, by amending Section 35A of the Central Excise Act, power of remand of the Commissioner (Appeals) has been taken away.
14.?In the present case, we are not concerned with the power of remand of the Commissioner (Appeals) under Section 35A(3) of the Central Excise Act, 1944. In such a situation, the question would arise whether the decision of this Court in the case of Medico Labs (supra) would continue to hold the field even after the decision of the Supreme Court in the case of MIL India Ltd. (supra). The person aggrieved, be it Revenue or the assessee, would of course, contend that when there was conscious decision of the Legislature to amend certain power of remand which was previously specifically provided in the statute, the same would amount to taking away powers which hitherto existed. We need not however, enter into this arena because in the present case, we are not concerned with this provision of appeal.
15.?We, however, cannot accept the argument of Ms. Mandavia that by virtue of sub-section (5) of Section 85, the same limitation on the Commissioner (Appeals) to remand a proceeding contained in Section 35A(3) of the Central Excise Act, 1944 must apply in the appeals under Section 85 of the Finance Act, 1994 also. This is so because, sub-section (5) of Section 85 though requires the Commissioner (Appeals) to follow the same procedure and exercise same powers in making orders under Section 85, as he does in the Central Excise Act, 1944 in appeals, this sub-section itself starts with the expression subject to the provisions of this Chapter. Sub-section (4) of Section 85 itself contains the width of the power of the Commissioner (Appeals) in hearing the proceedings of appeal under Section 85. The scope of such powers flowing from sub-section 85(4) therefore cannot be curtailed by any reference to sub-section (5) of Section 85 of the Finance Act, 1994.
7. From the above, it is clear that the sub-section 4 of Section 85 of Finance Act, does not specifically curtail the power to remand as in the case of Section 35 (A) (3) Central Excise Act. 1944. Following the decision laid in Associated Hotels Ltd case, I hold that the impugned order remanding the matter to the original authority does not call for any interference. The appeal filed by the department is dismissed.
(Dictated & Pronounced & in open court) (SULEKHA BEEVI C.S.) MEMBER(JUDICIAL) dks.
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