2008 (9) TMI 55 - AT - Service Tax

Appeal on Clarificatory Letter's Maintainability and Fee Requirement

The appeal against a clarificatory letter issued by the Assistant Commissioner of Central Excise was deemed not maintainable as the letter did not result ... Maintainability of appeal - appeal against non-adjudicatory communication / clarificatory letter - fee payable on appeal under Section 86(6) of the Finance Act, 1994 - requirement of adjudication/decision by an adjudicating authority for right to appeal - remedy by Authority for Advance Rulings under Chapter IIIA of the Central Excise Act, 1944Fee payable on appeal under Section 86(6) of the Finance Act, 1994 - graded fee structure - Whether any fee is payable by the appellant on filing the appeal and, if so, the amount payable under Section 86(6). - HELD THAT: - The Tribunal examined the amended sub-section (6) of Section 86 introduced by Finance (No.2) Act, 2004 and its notification of commencement. The statutory scheme prescribes a graded fee linked to the amount of service tax, interest and penalty demanded by the Central Excise Officer and contains no general exemption for appellants who face no such demand, save for appeals filed by the Department or cross-objections. A plain reading indicates that an appeal to the Appellate Tribunal attracts the minimum statutory fee where no specific demand exists. Prior decisions cited by the appellant were factually distinguishable as they concerned cases where a fee had already been paid and the question was adequacy of that payment. Applying the statutory text, the Tribunal held that the appellant is liable to pay the minimum prescribed fee (Rs. 1,000) on instituting the appeal. [Paras 6, 7, 8, 9, 11]The appellant is required to pay the minimum fee prescribed by Section 86(6).Maintainability of appeal - appeal against non-adjudicatory communication / clarificatory letter - requirement of adjudication/decision by an adjudicating authority for right to appeal - Whether the appeal is maintainable against the Assistant Commissioner's letter of 28.12.2007 which was clarificatory and not an adjudication. - HELD THAT: - The Tribunal analysed the concept of 'decision' or 'order' and the meaning of 'adjudicating authority' by reference to the Finance Act and relevant provisions of the Central Excise Act. Appeals lie against decisions or orders resulting from adjudication by an adjudicating authority; communications that are merely clarificatory and do not determine rights or impose obligations do not constitute appealable orders. Although in exceptional cases a communication short of formal adjudication may be treated as a decision if it adversely affects rights, there must nevertheless be a determination in the file. Here the impugned letter was issued in response to the appellant's request for guidance, merely stated the departmental position regarding applicability of an exclusion in Rule 9(b) of the Cenvat Credit Rules and concluded with 'This is for information please.' There was no determination of liability, no adjudication, and no final adverse order. The cases relied upon by the appellant involved letters which in fact determined obligations or reversed credits; they are distinguishable. Consequently there was no cause of action for appeal to the Commissioner (Appeals) and the subsequent appeal to the Tribunal was not maintainable. [Paras 11, 12, 13, 14, 15]The appeal against the clarificatory letter is not maintainable and is dismissed.Final Conclusion: The miscellaneous application is rejected; the appellant must pay the statutory fee and the appeal against the Assistant Commissioner's clarificatory letter is not maintainable and is dismissed. Issues Involved:1. Maintainability of the appeal against a clarificatory letter.2. Requirement of payment of appeal fee under Section 86 of the Finance Act, 1994.Detailed Analysis:1. Maintainability of the Appeal:The primary issue in this case revolves around whether an appeal is maintainable against a clarificatory letter issued by the Assistant Commissioner of Central Excise. The appellant had sought guidance on the availment of Cenvat credit for service tax paid by their associates under the category 'Business Auxiliary Service'. The Assistant Commissioner responded with a letter clarifying the provisions of the Cenvat Credit Rules without raising any demand or adjudicating any dispute. The Commissioner (Appeals) dismissed the appeal, stating that the letter was merely clarificatory and did not constitute an adjudication or a decision adversely affecting the appellant's rights. The Tribunal concurred, emphasizing that for an appeal to be maintainable, there must be an adjudication resulting in a demand for duty or penalty. The Tribunal noted that the letter in question did not determine any rights or obligations of the appellant and was issued in response to their request for clarification. Therefore, the appeal was not maintainable.2. Requirement of Payment of Appeal Fee:The second issue concerns whether the appellant was required to pay a fee for filing the appeal under Section 86 of the Finance Act, 1994. The appellant argued that no fee was payable as there was no demand for service tax, interest, or penalty. However, the Tribunal clarified that Section 86(6) mandates the payment of a fee for appeals to the Appellate Tribunal, with the amount depending on the service tax, interest, and penalty involved. The Tribunal highlighted that the amended provision, effective from 1.11.2004, introduced a graded fee structure based on the amounts in question. The Tribunal rejected the appellant's contention, stating that the fee is required irrespective of whether there is a demand, and even if the appeal were maintainable, the appellant would need to pay the minimum fee prescribed by the statute. The Tribunal referred to previous cases where the fee paid by the appellants was deemed sufficient but clarified that these cases did not support the proposition that no fee is payable.In conclusion, the Tribunal rejected the miscellaneous application and held that the appeal was not maintainable. The Tribunal emphasized that the letter from the Assistant Commissioner was merely clarificatory and did not constitute an adjudication or decision affecting the appellant's rights. The Tribunal also affirmed that the appellant was required to pay the prescribed fee for filing the appeal under Section 86 of the Finance Act, 1994.