Whether monetary limit for filing appeal to Tribunal applicable for service tax?

PJ/CASE LAW/2015-16/2566

Case:- INDOWORTH (INDIA) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NAGPUR

Citation:- 2012 (25) S.T.R. 98 (Tri. - Mumbai)

Brief facts:- The basic issue that is to be resolved in the present appeal is that whether the provisions of monetary limit for filing appeal to the Tribunal as contained in section 35B of the Central Excise Act, 1944 is applicable for appeals filed under service tax. The section 35B of the Central Excise Act gives the power to the Tribunal to refuse to admit an appeal if the duty involved in the appeal is less than Rs. 50,000 (limit enhanced to Rs. 2,00,000 w.e.f. 06.08.2014). In Contrast, section 86(7) of the Finance Act pertaining to Appeals to Appellate Tribunal states that “Subject to the provisions of this chapter, in hearing the appeals and making orders under this section, the Appellate Tribunal shall exercise the same powers and follow the same procedure as it exercises and follows in hearing the appeals and making orders under the Central Excise Act, 1944. It is worth noting that section 83 of the Finance Act making applicable certain provisions of Central Excise Act, 1944 to the service tax laws does not has mention of section 35B of the Central Excise Act, 1944. Therefore, the question arises that whether the monetary limit to file appeal to Tribunal is also applicable to service tax or not.

Appellant’s contention:-The learned counsel for the appellant refers to the provisions of Section 86 of the Finance Act, 1994 and those of Section 35B of the Central Excise Act, 1944 and submits that there is no provision similar to the second proviso to sub-section (1) of Section 35B ibid under Section 86 ibid and, therefore, in respect of a service tax appeal coming within the jurisdiction of Single Member, the Bench has no discretion to refuse to admit the appeal. In this connection, the learned counsel relies on the Tribunal’s decision in Asiatic Enterprises v. Commissioner - 2007 (5)S.T.R.93 (Tri. - Kolkata) = 2008 (224)E.L.T.406 (Tri. - Kolkata).

Respondent’s contention:-The learned JDR has endeavoured to derive the power for this Bench to refuse admission to the present appeals, from sub-section (7) of Section 86 of the Finance Act, 1994.

Reasoning of judgment:-They find that the learned counsel has stated the legal position correctly. In the case of a Central Excise appeal coming within the jurisdiction of a Single Member, there is a discretion to refuse to admit the appeal, in the factual situation covered by the second proviso to sub-section (1) of Section 35B of the Central Excise Act. A similar provision is not available under Section 86 of the Finance Act, 1994. Sub-section (7) of Section 86, relied on by the learned JDR is reproduced below :

“(7) Subject to the provisions of this Chapter, in hearing the appeals and making orders under this section, the Appellate Tribunal shall exercise the same power and follow the same procedure as it exercises and follows in hearing the appeals and making orders under the (Central Excise Act, 1944) (1 of 1944).”

It has been argued that, by virtue of the above provision, the Appellate Tribunal (Single Member) can exercise the same power and follow the same procedure as it exercises under the second proviso to sub-section (1) of Section 35B of the Central Excise Act. This argument of the learned JDR is not sustainable for two reasons. Firstly, Section 35B of the Central Excise Act is not one of the provisions specified in Section 83 of the Finance Act for applicability to service tax appeals. Secondly, sub-section (7) of Section 86 of the Finance Act, 1994 purports to authorize the Appellate Tribunal to exercise the same powers and follow the same procedures as it exercises and follows in hearing the appeals and making orders under Central Excise Act, 1944 in the matter of hearing appeals and making orders in Service Tax cases. The phrase ‘hearing the appeals and making orders’ appearing in sub-section (7) of Section 86 ibid is significant for its import. It would mean that the provision is applicable to the context of hearing a service tax appeal on merits and passing orders thereon. Obviously, sub-section (7) of Section 86 ibid authorizes the Tribunal to adopt the provisions of Section 35C of the Central Excise Act, for the purpose of hearing and making orders on service tax appeals. They find that the same view has been taken by the learned Single Member in the case of Asiatic Enterprises (supra).

The present appeals, therefore, do not require admission. At this stage, the learned counsel for the appellant submits that three more appeals of the same party viz appeal Nos. S.T./91, 108 and 268/10 are pending before this Bench. They told that, in all the appeals, a common issue is involved (refund). The present appeals shall, therefore, be clubbed with the above three appeals mentioned by the learned counsel for the purpose of final hearing.

Decision:- Appeal allowed.

Comment:- The analogy of the case is that the provision of section 86(7) of the Finance Act cannot be interpreted to mean that the monetary limit prescribed for filing appeals to the Tribunal under section 35B of the Central Excise Act, 1944 also apply to service tax appeals. The provision of section 86(7) only refers to application of the provisions of section 35C regarding orders of the Appellate Tribunal to the service tax laws.

Prepared by:- Monika Tak

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PJ/CASE LAW/2015-16/2566

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