2010 (8) TMI 251 - AT - Service Tax

Tribunal allows appeal, remands case for re-evaluation of service tax & penalty.

COMMISSIONER OF C. EX., MADURAI Versus KODAI AUTOMOBILES LTD.

The Tribunal allowed the appeal, setting aside the impugned order and remanding the case for further proceedings. It held that the Commissioner (Appeals) ... Remand powers of commissioner (Appeal) - Commissioner (Appeals) has no power to remand the case back to the original authority w.e.f.11-5-2001 - re-quantification of the service tax payable by the assessees under Section 73(2) of the Finance Act by excluding the service tax demanded on light motor vehicles - adjudicating authority for fresh decision after extending a reasonable opportunity to the assessees of being heard in their defence - appeal is thus allowed by way of remand Issues:1. Power of Commissioner (Appeals) to remand the case after amendment of Section 35A(3) of the Central Excise Act, 1944 by the Finance Act, 2001.Analysis:The issue in this case revolves around whether the Commissioner (Appeals) retains the power to remand a case to the adjudicating authority following the amendment of Section 35A(3) of the Central Excise Act, 1944 by the Finance Act, 2001. The Tribunal examined various judicial precedents to determine the legislative intent behind the amendment. The Hon'ble Punjab High Court in the case of Commissioner v. Enkay (India) Rubber Co. Pvt. Ltd. held that the power of remand of the Commissioner (Appeals) was taken away by the Finance Act, 2001. The Tribunal also referred to the case of CCE, Jalandhar v. B.C. Kataria, where the High Court reiterated the position established in the Enkay case. The Tribunal distinguished the Gujarat High Court's decision in CCE, Ahmedabad v. Medico Labs, emphasizing that the amendment explicitly removed the power of remand. Additionally, the Tribunal analyzed the Supreme Court's decision in Union of India v. Umesh Dhaimode, highlighting that the Court was not dealing with a situation where the power of remand was specifically conferred and then taken away by an amendment.Moving forward, the Tribunal referenced the case of MIL India Ltd. v. CCE, Noida, where the Apex Court noted that the power of remand by the Commissioner (Appeals) had been eliminated by the 2001 amendment. The Tribunal acknowledged a dissenting view in Bacha Motors (P) Ltd. v. CST, Ahmedabad, which attempted to distinguish the MIL India decision, but ultimately aligned with the Division Bench's decision in Clestra Modular Systems Pvt. Ltd. The Tribunal concluded that the Commissioner (Appeals) no longer possessed the authority to remand cases post the 2001 amendment. However, the Tribunal directed a re-quantification of service tax and penalty, remanding the case to the adjudicating authority for a fresh decision while providing the assessees with a reasonable opportunity to present their defense.In summary, the Tribunal allowed the appeal by setting aside the impugned order and remanding the case for further proceedings in accordance with the legal principles discussed in the judgment.