By TIOL News Service

MUMBAI, MAR 11, 2016: THE respondent re-treads tyres and is registered as provider of ‘management, maintenance and repair service' since October 2005. Respondent had paid service tax of Rs.1,43,487/- for the period from 16 th June 2005 to 31 st March 2007 after availing the benefit of notification no. 12/2003-ST dated 20 th June 2003. It was alleged in the show cause notice that assessee was liable to tax of Rs.5,60,235/- on the entire invoiced amount of Rs.50,54,494/- because the exemption was incorrectly availed by them; the exemption allowed abatement of goods sold along with rendering of service and to the extent that it was separately billed in the invoice.

The Commissioner (A) set aside the order confirming the tax demand and also directed implementation of an earlier o-in-a by which the small service provider exemption was extended to the assessee.

Revenue is against this order. An additional ground has also been incorporated seeking imposition of penalty under Section 76 of Finance Act, 1994.

The Bench observed that the introduction of additional ground of appeal through the review undertaken in exercise of powers conferred by section 86(2A) of Finance Act, 1994 is outside the scope of these proceedings;that having failed to review the o-in-o, there is no provision for objecting to non-imposition of the same by the first appellate authority or to require the Tribunal to step in to fill the perceived ‘breach'.

Upon being informed by the respondent that the dispute was taken to the Commissioner (A) twice before the review that led to the present appeal, the CESTAT made the following observations –

++ We would not like to comment on the travails that the assessee has been compelled to undergo because of unwillingness of departmental authorities to respect the adjudicatory hierarchy. We can only extend our sympathies and hope that this is an exception and not the norm. We would also desist from making any observations about the apparent lack of communication and coordination within the same establishment that has led to this sorry state of affairs.

++ Our second reason for not deciding on merits is prompted by the letter of respondent dated 8 th January, 2016 placed before us in lieu of representation and seeks dismissal of appeal of Revenue as the amount in dispute is below the threshold limit that allows exercise of discretion in refusing to hear the matter.

++ We notice that this is so and, additionally, that it is well below the prevailing limit of Rs. 10 lakhs prescribed by the Central Board of Excise and Customs, in its instruction in F.No. 390/Misc./163/2010-JC dated 17 th December 2015 in exercise of powers under section 35R of the Central Excise Act, 1944 made applicable to Finance Act, 1994 for filing appeals before the Tribunal.

The AR, however, did not seem to agree with the plea by the respondent that the appeal needs to be dismissed in view of the revised litigation policy.

The AR submitted that - they being the representative of the Chief Commissioners/ Commissioners, in the absence of any application for withdrawal, the Hon'bleCESTAT may not proceed with the disposal of Department's appeal citing the parameters contained in the Policy. Further, in the absence of instructions from the jurisdictional Chief Commissioners/Commissioners, it is not appropriate for the ARs to comment whether or not the appeal is covered within the parameters for withdrawal.

The Member (T) writing for the Bench made the following scathing observations -

+ Doubtlessly, mass listing, preceded by compilation and evaluation, of pending appeals will require the active co-operation and enthusiasm on the part of the Chief Commissioners/ Commissioners and the office of the Chief Commissioner (AR) in the Tribunal.

+ However, in a matter is listed in its turn, even if active enthusiasm be evidently lacking, non-cooperation in disposal of listed matter is highly improper.

+ Authorized Representatives may plead and act for the Commissioner but they are appointed by the Central Government. They, therefore, are not expected to act in a manner that is directly against the expressed and articulated intent of the Central Government.

+ Indeed, it is highly improbably that the Commissioner for whom they are pleading or acting would go so far as to suborn a stated intent of the Government and require them to offer non-co-operation in disposal of a matter listed before the Tribunal. Above all, they are officers of the court owing their position to the CESTAT Procedure Rules, 1982 and cannot refuse to assist the court.

+ The Authorized Representative has, in his submission, sought deferring a decision till some departmental authority has reached a conclusion that the said matter is covered by the instruction supra. Authorized Representatives may, probably, be unaware of CESTAT Procedure Rules, 1982. For those who are ignorant of them, we draw attention to – (Rule 40 of the Rules, 1982).

+ Chief Commissioner (AR) is advised to convey the gravity of the statutory conferment supra and ensure that all his officers are aware of the consequences of transgression. The Tribunal is not subject to any departmental authority and is not required to submit to the decisions of a departmental authority in the discharge of its function. To presume that disposal of Departmental appeal by Tribunal will have to await the application for its withdrawal is also a patent disregard of the authority conferred on the Tribunal by law.

+ Personal disinclination, ideological dissonances or interpretational discordance should not affect implementation of policies of the Central Government . We are not certain if the submission of the learned Authorised Representative was prompted by such or by advisement from above. Either way, it does not bespeak well of institutional credibility and hierarchical decorum. Chief Commissioner (AR) may need to take immediate remedial measures.

+ We have made observations supra with intent to educate; considering the circumstances, we have been remarkably moderate in expressing ourselves. We, at the same, record our objections to the submission in the strongest possible terms and would bring this to the notice of the Central Government and the Central Board of Excise & Customs as a glaring example of the inertia with which policy prescriptions are dealt with by the field formations.

The Bench directed the Registry to transmit a copy of this order to the Secretary, Department of Revenue and Chairman, Central Board of Excise & Customs.

The Revenue appeal was dismissed.

In passing: CONSISTENCY  requires you to be as ignorant today as you were a year ago. – Bernard Berenson, Notebook, 1892.

(See 2016-TIOL-591-CESTAT-MUM)