Payment made to DOT accepted by the department as discharge of service tax.

PJ/Case law/2013-14/1883

Case:- M/s BHARAT SANCHAR NIGAM LTD Vs C.C.E., RANCHI

Citation:- 2013-TIOL-1327-CESTAT-KOL

Brief Facts:- Appellant filed Miscellaneous Application for seeking restoration of their Appeal dismissed by this Tribunal for non-compliance with directions of pre-deposit of dues.

Appellant’s Contention:- The appellant submit that the order dated 27.02.2012 has been passed by this Tribunal dismissing their appeal due to non-representation and noncompliance with the directions of pre-deposit of dues made on 14.11.2011. The appellant also submit that they have not received the notice of hearing and hence could not remain present on the date of hearing on 27.02.2012. The appellant further submit that this Miscellaneous Application was earlier heard by this Bench on 04.10.2012, directing to file an affidavit indicating payment to DOT and on other facts, accordingly, the applicant had filed affidavit on 30.04.2013. The appellant further submit that in the meantime on the basis of a Circular dated 01.01.2013, the department had initiated recovery proceedings against them. The applicant challenging the said proceeding had filed Writ Petition before the Hon'ble High Court at Ranchi. The Hon'ble High Court at Ranchi by its order dated 21.06.2013 directed the Tribunal to dispose their Miscellaneous Application listed for hearing on 11.07.2013. Ld. Chartered Accountant further submitted that out of the total demand of Rs. 14.63 Crores, around Rs.8.66 Crores relates to DOT payment and around Rs. 3.14 Crores relates to error in computation of the demand. It is his submission that the payment made to DOT has now been accepted by the Commissioners of Jamshedpur and also Ranchi towards discharge of their Service Tax liability. Also, he has placed reliance on a judgement of the Principal Bench of New Delhi in their own case vide Order No.ST/588/2011-DB dated 04.11.2011 where such payment had been accepted. The appellant submit that this Tribunal in the earlier case had remanded the matter to the adjudicating authority for re-consideration of the whole issue.

Respondent’s Contention:-The Revenue has not seriously disputed about the facts relating to the computation of demand submitted by the appellant. The Revenue has no objection in remanding the matter to the adjudicating authority for re-construction.

Reasoning of Judgment:- The Tribunal heard both sides and perused the record. The Tribunal finds that this Tribunal has dismissed their Appeal on 27.02.2012 for non-compliance with the provisions of section 35F of Central Excise Act, 1944 and non-appearance on behalf of the applicant. It is the submission of the appellant that the notice of hearing was not received by them hence they could not remain present to make submission before this Tribunal that the total demand is erroneous and also major portion of the demand has already been paid by them. The Tribunal also finds that the Hon'ble High Court at Ranchi has directed this Tribunal to dispose their Miscellaneous Application seeking restoration of their Appeal dismissed earlier. The Hon'ble High Court's has observed as follows:-

4. Considering the submission of learned counsel for the parties, we are disposing of these writ petitions with directions to the CESTAT to decide the restoration application of the writ petitioner on 11th July, 2013 or within a reasonable period and if the petitioner's appeals are restored by the CESTAT then petitioner's application for interim relief, if appeal itself cannot be decided may be considered and appropriate order may be passed and that order shall be binding and interim order dated 7th February, 2013 passed in these writ petitions shall continue till any order is passed on restoration application and if needed on petitioner's stay petition. It is expected from the CESTAT that if the appeals of the writ petitioner are restored then the stay petition will be considered, if appeal are not decided, and it should not be beyond the period of 30 days.

From the submissions advanced by both sides the Tribunal finds that find that there is considerable force in the argument of appellant that prima facie they are not required to pay any duty as major portion of the duty relates to payment of DOT which has now been accepted by other Commissionerates as proper discharge of Service Tax. Also, apparently, The Tribunal finds that there is error in the computation of duty to the extent of Rs. 3.14 Crores. In these circumstances, keeping in view the direction of Hon'ble High Court at Ranchi and also in the interest of justice, The Tribunal allow the Miscellaneous Application and restore the appeal dismissed earlier to its original number.

The Tribunal further finds that it appropriate to dispose of their appeal itself as observed by the Hon'ble High Court at Ranchi in the aforesaid order. Thus, after waiving the requirement of pre-deposit of dues adjudged we take up the appeal itself for disposal with the consent of both the sides. We find that the issue of payment to DOT by the applicant had been raised at various levels and before the Commissioners time and again. Initially the payment of DOT has not been accepted by the department as discharge of their Service Tax liability since the amount has not been paid to the Ministry of Finance, Deptt. of Revenue, after the Appellant separated from DOT. However, from the orders submitted by the appellant, The Tribunal also find that the Commissionerates at Jamshedpur and Ranchi have accepted the payment made to DOT as discharge of their Service Tax liability. Also, Tribunal find in similar circumstances this Tribunal has remanded the matter to the adjudicating authority for re-consideration of the payment made to DOT as discharge of liability towards Service Tax. Following the said precedent, The Tribunal remands the matter to the adjudicating authority for re-consideration of all issues afresh and also directs the Appellant to produce all evidences in their support relating to payment made to DOT and other aspects. Needless to mention a reasonable opportunity of hearing be granted to the appellant. Tribunal makes it clear that all issues are kept open. In the result, the impugned order is set aside and the Appeal is allowed by way of remand. Stay Petition also disposed of. Miscellaneous Application allowed.

Decision:- Appeal is allowed by way of remand.

Comment:-In this case, due to the fact that the payment made to DOT has been accepted by the revenue department as discharge of service tax in another Commissionerate, Tribunal remanded the matter to the adjudicating authority for re-consideration of the payment made to DOT as discharge of liability towards Service Tax.

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PJ/Case law/2013-14/1883

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