Matter remanded to the adjudicating authority should be decided following the conditions of remand.

PJ/ Case Law/2013-14/1621

Case:- MADHYA PRADESH CONSULTANCY ORGANIZATION LTD Vs COMMISSIONER OF CENTRAL EXCISE, BHOPAL

Citation:- 2013-TIOL-1027-CESTAT-DEL

Brief facts:- The prayer in the application is to dispense with condition of pre-deposit of service tax of Rs.81, 47,713/- and penalty of identical amount imposed under section 78 of Finance Act, 1994. In addition a penalty of Rs. 1,000/- stands imposed under section 77 of Finance Act, 1994. The relevant facts in brief are that the appellant is a company registered under the company act having been promoted by national level financial institutions such as IFCI, IDBI and ICICI and such other nationalised banks. The appellants are engaged in providing consultancy services to the private sector on which they were paying service tax; they also carry on various research and development projects and other training programme acting as nodal agency on behalf of different Ministries of Central Government. Commissioner, in pursuance of show cause notice issued that the appellants have rendered taxable service by organizing work shop or seminar for the clients and therefore confirmed the demand of service tax and imposed penalty as mentioned above.

Appellants contention:- Learned advocated for the appellant submits that the demand of service tax has been made on amounts received as grant in aid from different government sources. No service provider - client relationship exists between the appellants and the government department. The work undertaken at the instance of government departments cannot be treated as taxable service. The grant in aid paid by the Government cannot be treated as charges for the services rendered by the appellants to the government departments. He relies on voluminous documents in support of his claim. In fact, the appellants filed application for producing certain additional evidence before the Tribunal which evidence has not been considered by the adjudicating commissioner. They also submits that identical issue has been decided by the Bangalore Bench of the Tribunal vide final order No.1113-1115/10 dt.22.7.10 in service tax appeals no.ST/555/08, ST/475/08 of ST/432/09 in the case of APICO Ltd. Co. Ltd. and others vs. CCE, Hyderabad.

Respondents Contention:- The respondent reiterated the findings of the lower authorities.

Reasoning of Judgement:- It was observed by the Tribunal thatthe order of the commissioner does not deal with the various issues raised. Further, as submitted by the learned Advocate, it was found that correspondences exchanged between the department and the appellants which are sought to be relied upon before Tribunal have not been considered by the commissioner. Further, the decision of the Tribunal dated 16.8.10 was not available when the matter was considered by the commissioner. It was also claimed that the bifurcation of taxable and non taxable services has been properly appreciated by the Commissioner.

In view of the above and in the interest of justice, it was deemed appropriate to set aside the order of the commissioner and remand the matter for fresh consideration after granting reasonable opportunity to the appellants. The appellants are permitted to file submissions including the evidence sought to be relied on within 45 days from the date receipt of this order. The Commissioner shall decide the issue afresh expeditiously preferably within six months from the date receipt of this order".

It is seen that the Commissioner in the impugned order has again confirmed duty and differentiated earlier decision of the Tribunal in the case of APICO Ltd. Co. Ltd. and others vs. CCE, Hyderabad by observing as under:-

It was found that the facts in the present case are dissimilar to the ones of APITCO Ltd. v. CCE, Hyderabad. The instant proceedings do not deal with the issues of relationship between assessee and government and the scope of 'scientific or technical consultancy'. I find that the decision in re APITCO Ltd. supra, sought to be relied upon by M/s. MPCON, is not applicable to the proceedings in view of difference in facts and the issue involved. In the instant proceedings, the issue involved is whether services rendered by MPCON to various individuals and concerns are chargeable to service tax when the source of money consideration is other than the service receivers".

As is seen from the above, the adjudicating authority has not followed earlier decision of the Tribunal in the case of APITCO Ltd. vs. CCE, Hyderabad by simply observing that the same is not applicable to the instant proceedings. However, he has not discussed as to what are facts distinguishing earlier order of the Tribunal in the case of APITCO Ltd. vs. CCE, Hyderabad from the present one. When the Tribunal has specifically remanded the matter for re-adjudication in the light of the decision rendered in the case of APITCO Ltd. v. CCE, Hyderabad, it was obligatory on the part of the Revenue to either follow the same or distinguish the same on facts or on law by making clear reference to the factual position. The observations of the adjudicating authority are not bringing out any difference between two matters. Hence, at this prima facie stage, the authority is of view that the appellant is entitled to claim unconditional stay.

Decision:- The stay application is allowed.

Comment:- The gist of the above case is that when the matter was remanded with a specific direction to decide in the light of the judgement given in the case of APITCO Ltd., the adjudicating authority ought to discuss and distinguish the case while denying its applicability in the facts and circumstances of the case. Failure to do so amounts to violation of the conditions of remand by the adjudicating authority.

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PJ/ Case Law/2013-14/1621

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