Of late there have been confusions as to jurisdiction before whom rebate cases pertaining to service tax should be filed when an order is passed by Commissioner of Central Excise (Appeals).
In terms of first proviso to section 35B(1) of Central Excise Act, which states that no appeal shall lie before the Appellate Tribunal and the Appellate Tribunal shall not have jurisdiction to decide any appeal in respect of any order passed by Commissioner (Appeals) if such order relates to
(b) Rebate of duty of excise on goods exported to any country or territory outside India or on excisable materials used in the manufacture of goods which are exported to any country or territory outside India.
In terms of section 35EE of Central Excise Act, where the order is of the nature referred to in first proviso to sub-section (1) of section 35B, Central Government may annul or modify such order.
Further section 35EE of Central Excise Act, was incorporated under section 83 of Finance Act, w.e.f 28.5.2012, on the basis of this incorporation there was confusions whether the orders pertaining to rebate of service tax passed by Commissioner (Appeals) where appealable before CESTAT or before the Revisionary Authority.
Considering the above set of provisions, Hon’ble CESTAT in case of M/s Glyph International Ltd, had held that “under section 83 of Finance Act, 1994, read with section 35EE of Central Excise Act, 1944 takes away the right of redressing the matter before CESTAT to hear rebate appeal. Revisionary authority has jurisdiction to hear such cases, as this aspect was clearly demarcated in law. Consequently, Revenue succeeds in saying that rebate claim matters should go to revisionary authority who has jurisdiction over the matter.
Challenging this order of Hon’ble CESTAT, M/s Glyph International Ltd filed a writ before the Delhi High Court, (2014 TIOL-560-HC-DEL-ST), wherein Hon’ble High Court had held that “the amendment to Section 83 by making a specific reference to Section 35EE of the Central Excise Act, did not make any difference to the nature of jurisdiction exercisable by the CESTAT under Section 86; as CESTAT continued to possess jurisdiction to decide on matters pertaining to rebate and refund”
This decision was rendered on the analogy that section 86 of Finance Act, which specifically did not curtail down the powers of CESTAT in hearing appeals pertaining to rebate cases.
There was one school of thought, which felt that in terms of section 86(7) of Finance Act, which states that “Subject to the provisions of this Chapter, in hearing the appeals and making orders under this section, the Appellate Tribunal shall exercise the same powers and follow the same procedure as it exercises and follows in hearing the appeals and making orders under the [Central Excise Act, 1944] (1 of 1944)”
Considering the provision of section 86(7), the said school of thought was of the view that even though section 86 did not specifically pose any restriction, however reading of section 86(7), in terms of this provision of the law, reading first proviso to section 35B (1) of Central Excise Act and section 35EE of Central Excise Act, which goes without saying that CESTAT did not have jurisdiction to hear cases pertaining to rebate.
However this view was negated by the Hon’ble High Court of Delhi in the above referred decision, by stating “It may be seen that Parliament always intended that an appellate remedy should be available in respect of refund and rebate claims. That power was exercisable by the CESTAT. The amendment of Section 83, in 2012 did not disturb the appellate remedy, i.e Section 86; the amendment did not limit the appellate power in any manner whatsoever. It is a settled position of law that exclusion of jurisdiction of courts and tribunals should be by way of express provisions, or through necessary intendment. This was stated as follows, by the Supreme Court in Subal Paul v. Malina Paul & Anr. (2003) 10 SCC 361 held as follows:
If a right of appeal is provided for under the Act, the limitation thereof must also be provided therein. A right of appeal which is provided under the Letters Patent cannot be said to be restricted. Limitation of a right of appeal in absence of any provision in a statute cannot be readily inferred.
Considering this development of law, the paper writers are of the view that orders of Commissioner (Appeals) pertaining to rebate of service tax, could be appealed before CESTAT.
However if there are any other contrary high court decisions in any State, then such State is bound to follow its jurisdictional high court’s decision.
Author- Paper writers below are practicing Chartered Accountants at Bangalore