Case Law Details
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 (A) 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.
CESTAT, KOLKATA BENCH
Commissioner of Service Tax, Kolkata
versus
Devansh Exports
ORDER NO. A – 443/KOL./2012
APPEAL NO. ST/520/2011
AND CO No. 10/2012
JULY 11, 2012
ORDER
S.K. Gaule, Technical Member
Heard both sides. The appellant filed this appeal against the Order-in-Appeal No. 267/ST/ Kol/11 dated 25.8.2011, whereby the ld. Commissioner (Appeals) has remanded the case to the lower adjudicating authority.
2. Briefly stated the facts of the case are that the respondents filed a refund claim amounting to Rs. 11,92,703/- 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 has sanctioned an amount of Rs. 33,188/- out of total refund claim of Rs. 11,92,703/- and the remaining amount of refund claim was rejected. The respondents challenged the same before the ld. Commissioner (Appeals). The ld. Commissioner (Appeals) vide his order dated 25.8.2011, remanded the matter to the lower authority. The revenue challenges the same. Hence the appeal.
3. 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”.
Similar view has been taken by the Hon’ble Supreme Court in the case of Mil India Ltd. v. CCE 2007 (210) ELT 188 (SC)
4. The Respondents 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, Commissioner (Appeals) has power to remand the case.
5. We have carefully considered the submissions and perused the records. The ld. Commissioner (Appeals) has ordered in his impugned order as under :
“I have carefully gone through the records of the case. In respect of DEBEX’s appeal, refund claim of service tax of 70,512/- was rejected by the lower authority owing to the reason that Input invoices cannot be correlated with export documents and rejection of refund claim of service tax of Rs. 10,90,003/- was rejected by the lower authority owing to the reason that the appellant had neither submitted impugned input invoices before the refund sanctioned authority nor before lower authority. In respect of correlation of impugned input invoice with export documents the appellant contended that Bulk Iron Ore was exported and in case of Lorry receipts for transporting Iron Ore from mines to port, it is neither feasible nor possible to mention Shipping Bill numbers in the Lorry receipts. They have also stated that once Iron Ore is transported to hired plot within Port area, they have no recourse but to export the goods. They referred to Notification No. 3/2008-ST dated 19.12.2008 in their defence. In respect of rejection of refund claim of service tax of Rs. 10,90,003/- they contended that owing to clerical mistake they submitted refund claim of Rs. 10,90,003/- instead of 1,25,702/- and requested to sanction the said revised claim.
In respect of sanction of refund claim of service tax of Rs. 20,250/- pertaining to Roy & Chatterjee Pvt. Ltd., DEBEX contented that the service rendered by Roy & Chatterjee Pvt. Ltd. were all ‘Port Services’ and that re-classification of the impugned services as rendered as “Cargo Handling Services’ would amount to re-assessment of services rendered by the service provider. They cited and referred to case law of M/s Anant Commodities Pvt. Ltd. v. CCE -2010 (18) STR 214 (T) = (2009-TIOL-2100-CESTAT-DEL) wherein the Hon’ble Tribunal has held that “without reassessment of service provider’s refund is to be granted to the exporter.” They cited and referred to O-I-A No. 30/ST/2010 dated 9.11.2009 passed by the Commissioner (Appeals), Kolkata and said to be accepted by Committee of Commissioners holding such services as port services and for which no correlation of input invoices & export documents is required. They also cited and referred to case law of CCE v. Dishman Pharma & Chemical Ltd. – 2010 (18) STR 214 (T) = (2010-TIOL- 1639-CESTAT-AHM) wherein Hon’ble Tribunal has held that. “Refund of service tax on services used in export of goods – Refund rejected as invoices issued by transport agencies giving details of export services, not produced – Contention that lorry receipts and shipping bills specify relevant details on export goods, not rebutted denial of refund on technical grounds not justified” and in case of R. Prabin Chandra – 2010 (18) STR 796 (Commr. – Appl.), it has been held that – “Non-mentioning of export invoice number and shipping bill number in lorry receipts not possible due to difficulty in linking export 30,000 tonnes of iron ore transported in 3000 truck moved much before export. Absence of registration on invoices only technical lapse and refund not deniable as per Board Circular dated 12.3.2009 – Notification No. 41/2007-ST dated 6.10.2007 as amended.” It is correct that it is practically impossible to co-relate input invoices with export documents in the instant case where export of bulk cargo of iron ore is involved. I find nothing on record that department disputed actual exportation of goods. In view of above, I find no other alternative but to remand the case to the lower authority to issue a fresh order after going through the aforesaid case laws vis-a-vis the said Notification.
I, therefore, set aside the impugned O-I-O dated 4.6.2009 and remand the matter to the lower authority to issue a fresh order after considering the discussion made case laws cited hereinabove and after providing an opportunity of personal hearing to the appellant.”
Hon’ble 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 CCE v. Orient Craft Ltd. [2011] 11 taxmann.com 316 (New Delhi – CESTAT), 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 (A) 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.
