2008 (10) TMI 106 - AT - Service Tax

Invalid Appointment Leads to Dismissal of Revenue's Appeal

COMMR. OF C. EX. & SERVICE TAX, BBSR-II Versus MAHANADI COALFIELDS LTD.

The Tribunal dismissed the Revenue's appeal and the application for condonation of delay due to the invalid appointment of the reviewing authorities. The ... Maintainability of appeal - locus standi to exercise the powers of review by Committee of Chief Commissioners - When the reviewing authorities were not validly appointed by appropriate notification in the Official Gazette to exercise the powers of review as an appropriate authority, the appeal filed by Revenue pursuant to review done by them fail and liable to be dismissed Issues Involved:1. Condonation of delay in filing the appeal.2. Locus standi of the Reviewing Chief Commissioners.3. Validity of the appointment of the Reviewing Chief Commissioners.4. Legality and propriety of the Order-in-Original (OIO) dated 26-3-2008.Issue-wise Detailed Analysis:1. Condonation of Delay:The Revenue filed an appeal with a vague application for condonation of delay without specifying the number of days delayed. The application mentioned two possible dates for considering the receipt of the Order-in-Original (OIO): 23-6-2008 and 7-4-2008. If 23-6-2008 is considered, the review is within the statutory limit of 3 months. If 7-4-2008 is considered, there is a delay of 12 days. The Tribunal dismissed the application for condonation of delay due to the lack of clarity and proper explanation.2. Locus Standi of the Reviewing Chief Commissioners:The appeal also called for ascertaining the locus standi of the Reviewing Chief Commissioners who authorized the filing of the appeal. The Tribunal referenced several cases, such as CCE, Siliguri v. M/s. Mall Exim Pvt. Ltd. and CCE, Siliguri v. M/s. Hindusthan Coca-Cola Beverages, to establish that a statutory authority appointed in accordance with the law and invested with defined powers shall have the locus standi to exercise those powers. However, the Tribunal required the Revenue to satisfy whether the proper manner of appointment of the Chief Commissioners was followed.3. Validity of the Appointment of the Reviewing Chief Commissioners:The Tribunal examined whether the Chief Commissioners who signed the undated Review Order cum-Authorization were appointed in the manner known to law and invested with the power under statute to perform the review function. The Revenue failed to produce any Gazette Notification confirming the appointment of the signatories. The Tribunal emphasized that appointments must be made by Notification in the Official Gazette to be valid. The Tribunal cited the case of Naffar Chandra Jute Mills and other relevant judgments to support that failure to appoint by appropriate notification renders the acts of such authorities null and void.4. Legality and Propriety of the Order-in-Original (OIO) dated 26-3-2008:The Revenue sought redressal against the OIO dated 26-3-2008, which reduced the service tax demand from Rs. 62,56,493/- to Rs. 8,41,988/- and imposed penalties. The Tribunal did not delve into the merits of the OIO due to the primary issue of the invalid appointment of the reviewing authorities. The Tribunal reiterated that authorities must be appointed and invested with power in the manner known to law to enable them to discharge their duties under law for the public good.Conclusion:The Tribunal dismissed the Revenue's appeal and the application for condonation of delay at the threshold due to the invalid appointment of the reviewing authorities. The Tribunal emphasized the necessity of proper appointment through Notification in the Official Gazette to vest statutory powers in public authorities. The decision was pronounced in the open court on 16-10-2008.