ST - Since appeal was filed before Commissioner(A) against o-in-o by appellant, Commissioner had no power to review o-in-o u/s 84 of FA, 1994 - Appeal allowed: CESTAT
By TIOL News Service
AHMEDABAD, JUNE 24, 2013: ON scrutiny of the records and copy of the agreement with their principal, it was observed by the Departmental officers that the appellant rendered the services of procuring orders and collecting payments from various customers and also place the orders to their principals on behalf of the customers and also organized supply of material from their principals to their customers directly, on the basis of consideration of quantity based commission.
It was the view of the Department that such activity of the appellant would fall under the category of Clearing and Forwarding Agent services under the provisions of Section 65(23) of Finance Act, 1994 and is chargeable to Service Tax w.e.f. 01.09.1999.
Accordingly, a SCN was issued to the appellant demanding Service Tax amounting to Rs.21,93,742/-. The said SCN was confirmed by original authority. While deciding the case, the adjudicating authority imposed discretionary penalty of Rs.1,67,400/- u/s 76 of FA, 1994 besides imposing penalty of Rs.500/- u/s 75A,, Rs.1000/- u/s 77 and an equivalent penalty of Rs.21,93,742/- u/s 78 of the FA, 1994.
The Commissioner, in exercise of his powers u/s 84 of FA, 1994, reviewed the O-in-O only on the ground that the mandatory penalty should be imposed upon the appellant u/s 76 of FA, 1994 and after issuing notice dt.01.09.2005 to the appellant, the present review order was passed by Commissioner, Central Excise, Daman and the penalty has been enhanced to Rs.21,96,743/- u/s 76 of FA, 1994.
The appellant has challenged this order in the present appeal.
None appeared for the appellant.
The Revenue representative submitted that against the o-in-o passed by the original authority, the appellant had preferred an appeal before Commissioner (Appeals) and vide an o-in-a dated 28/07/2005 the appeal was allowed. However, against this o-in-a, the department had preferred an appeal and which is pending before the CESTAT. Inasmuch as the present appeal should also be tagged with department's appeal pending before the Tribunal, the Revenue submitted.
The Bench observed -
"5. After going through the case records, we find that the present review order has been passed by the Commissioner, Central Excise, in exercise of his powers vested in him under Section 84 of Finance Act, 1994. As per the provisions of Section 84 of Finance Act, 1994, the statutory requirements for revision of an order passed by a subordinate officer are that:
i) such order is not legal and proper,
ii) no appeal against such issue is pending before the Commissioner (Appeals)
iii) the stipulated period of 2 years from the issue of Order-in-Original is not over.
6. We find that the Commissioner, in impugned order, in Para 6, has stated that it is confirmed by Commissioner (Appeals) that no appeal against said Order-in-Original is pending before him. Also, in Para 10 of the impugned order, the Commissioner himself has mentioned that impugned Order-in-Original was set aside by the appellate authority in favour of the assessee against which the Department has filed an appeal before Tribunal. We find that there is no dispute about the fact that appeal against said Order-in-Original was filed before Commissioner, Central Excise (Appeals), and this fact is admitted by the Commissioner in his order itself.
7. In such a scenario, the condition (ii) that no appeal against such issue is pending before Commissioner (Appeals) is not fulfilled in the present case and accordingly, the Commissioner has no powers to review the Order-in-Original."
Holding that the order-in-review passed by the Commissioner was not as per the provisions of Section 84 of Finance Act, 1994, the same was set aside and the appeal was allowed.
In passing: The dates -
+ SCN - 23/08/2004
+ O-in-O - 31/12/2004
+ O-in-A - 28/07/2005
+ SCN in exercise of revisionary powers - 01/09/2005
+ Order-in-revision - 26/12/2006
In all probability, the concerned authorities might have taken the following view while initiating revisionary proceedings -section 84 mandates that while exercising the revisionary power no appeal should have been pending before the Commissioner(A); in the present case, the appeal was not pending but already disposed of!
(See 2013-TIOL-952-CESTAT-AHM)
