2016 (10) TMI 235 - HC - Service Tax

High Court rules for appellant, emphasizes appeal rights, dissolves Disputes Committee. Remitted for reconsideration, ensuring remedy.

The High Court ruled in favor of the appellant, emphasizing their right to appeal and the dissolution of the Committee on Disputes. The matter was ... Restoration of appeal of the PSU - demand of service tax - service tax was deposited in the consolidated fund of India under the Head 0044? - Held that:- the appellant is being deprived of hearing of its appeal on merits only for the reason that initially the Tribunal, vide order dated 30.10.2006, had referred the matter to the Committee on Disputes in terms of the order passed by Hon'ble the Supreme Court in Oil and Natural Gas Commission's case (supra). It is not in dispute that the Committee on Disputes thereafter directed the parties to sit across the table and resolve the dispute vide order dated 2.11.2006, but the dispute could not be resolved. There is no Committee on Disputes in existence, which would take further view on the aspect that the matter already referred by it for settlement between the parties, in fact, could not be settled, hence, the appellant should be permitted to pursue the appeal. In these circumstances, the appellant cannot be left without any remedy. The order passed by the Tribunal dated 25.10.2012 declining to restore the appeal is set aside. The matter is remitted back for re-consideration thereof on merits. Issues:1. Restoration of appeal on original number and hearing on merit2. Denial of promotion due to order by Committee on Disputes3. Extinguishment of order post Supreme Court judgment4. Validity of instructions issued by Government post Supreme Court judgment5. Power of Central Excise Department to claim service tax again6. Jurisdiction and malafide exercise by Central Excise7. Irregularity in depositing service tax in consolidated fund8. Authority of Central Excise to demand service tax afresh with penalty9. Allegation of manifest injusticeAnalysis:Issue 1:The appellant challenged a demand of service tax confirmed by the Commissioner, where the tax was deposited in the government treasury instead of the designated bank. The Tribunal referred the matter to the Committee on Disputes, which directed parties to settle but no resolution was reached. The Tribunal dismissed the restoration application, citing lack of permission from the Committee. However, the High Court held that the Committee on Disputes had out-lived its utility as per a Supreme Court judgment, and the appellant should not be deprived of the right to appeal.Issue 2:The respondents argued against the restoration, stating that the Committee on Disputes had not granted permission, making the application not maintainable. They contended that directing parties to settle was sufficient. The High Court disagreed, emphasizing the appellant's right to pursue legal remedy and stating that the circular issued by the Central Board of Excise & Customs could not override statutory appeal rights.Issue 3:Referring to a recent Supreme Court judgment, the High Court highlighted that the Committee on Disputes had been dissolved, removing the need for its clearance. The Court emphasized that the absence of the Committee should not leave the appellant without a remedy, leading to the decision to set aside the Tribunal's order and remit the matter for reconsideration on merits.Conclusion:The High Court ruled in favor of the appellant, emphasizing their right to appeal and the dissolution of the Committee on Disputes. The matter was remitted for reconsideration on merits, ensuring the appellant is not left without a remedy.