TaxTMI 
TaxTMI 
2013 (8) TMI 531
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....deposit to consider the case on merits on remand. [2.0] Facts leading to the present petition in nutshell are as under: [2.1] That a showcause notice was issued by the Commissioner of Central Excise, AhmedabadIII on 11.04.2008 by which the petitioner was called upon to show cause as to why the service tax amounting to Rs. 3,45,21,135/+ Edu.Cess Rs. 6,01,077/+ Secondary & Higher Edu. Cess Rs. 1,59,209/totalling to Rs. 3,52,81,421/should not be demanded and recovered from them in cash for the period from September 2004 to February 2008 by invoking the extended period of 5 years under the first proviso to section 73(1) of the Finance Act, 1994 read with Rule 14 of the Cenvat Credit Rules, 2004 as well as the interest thereon at applicable rate should not be charged/recovered from them under Section 75 of the Finance Act, 1994 read with Rule 14 of the Cenvat Credit Rules, 2004 and the penalty should not be imposed under Section 76 of the Finance Act, 1994 for failure to make the payment of service tax payable, which is short paid by them in term of Section 68 of the Finance Act, 1994 as well as the penalty should not be imposed upon them under Section 78 of the Finance Act, 1994 ....
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....ourse of hearing of the stay application, it was contended on behalf of the petitioner that the order passed by the Commissioner is against the principles of natural justice inasmuch as the Commissioner relied upon the reports of the Assistant Commissioner dated 07.03.2011 and 19.04.2011 and the copies of the reports were not given to them and as such it was requested on behalf of the petitioner to remand the matter back to the original adjudicating authority. It appears that while hearing the stay application, the Tribunal took up the appeal also for hearing and by impugned order, the Tribunal remanded the matter back to the original adjudicating authority. However, observing that the appellants (petitioners herein) have not extended full cooperation and have not given necessary details as per the earlier directions of the Tribunal and consequently the appellant did not fulfill their obligation which has resulted in OIO, the Tribunal considered that the appellant could be required to put to some condition. The Tribunal also observed that it has become necessary to ensure that appellant cooperates with the department and therefore, while remanding the matter back to the original ad....
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.... annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary. It is submitted that the terminology "direction" in the said provision means giving certain guidance or command on the basis of which the original adjudicating authority is required to pass a fresh order. It is submitted that there is a difference and distinction between terminology "direction" to the lower authorities to do de novo adjudication proceedings in a particular way and the terminology "precondition" for setting aside the order appealed. It is, therefore, submitted that the direction issued by the Appellate Tribunal directing the petitioner - original appellant to deposit a sum of Rs. 50 lakh while remanding the matter to the original adjudicating authority, by way of precondition before considering the case on merits on remand, is wholly without jurisdiction and beyond the powers conferred under Section 35C of the Act. [3.3] Shri Paresh Dave, learned advocate appearing on be....
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....sued direction directing the petitioner - original appellant to deposit a sum of Rs. 50 lakh only, against the total liability of Rs. 3,52,81,421/, no error or illegality has been committed by the Tribunal. [4.1] Now, so far as the power of the Appellate Tribunal to issue such a direction of deposit of some amount while remanding the matter back to the original authority, it is submitted by Shri Parikh, learned counsel appearing for the Department that considering section 35C of the Act, Tribunal has been invested with the discretionary power to issue such direction as it deems fit which is inclusive of directing deposition of some amount [looking to the conduct of the assessee] and it may not be restricted to issuance of direction with respect to how to pass a fresh order by the adjudicating authority on merits [as sought to be contended on behalf of the petitioners]. Therefore, it is submitted that on facts and even sometimes to protect the interest of the revenue and looking to the conduct of the assessee and if it is found that the assessee has tried to delay the proceedings and has not cooperated like in the present case, the Tribunal may issue direction as it deems fit, mo....
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....not be applicable. It is submitted that so far as the decision of the Allahabad High Court is concerned, while quashing and setting aside the order in original on the ground that same was in breach of principles of natural justice, while remanding the matter back to the original adjudicating authority, the Appellate Tribunal passed an order of predeposit under Section 35F of the Act. It is submitted that once the appeal was disposed of by the Appellate Tribunal, there was no question of predeposit of duty and/or liability under Section 35F of the Act and therefore, the same was rightly quashed and set aside by the Allahabad High Court. It is submitted that therefore the decision of the Allahabad High Court would not be applicable to the facts of the present case. It is submitted that similarly the decision of the Madras High Court also, on facts, would not be applicable to the facts of the present case. [6.0] Having heard the learned advocates appearing for respective parties at length, the short question which is posed for consideration of this Court is whether in exercise of powers under Section 35C of the Act and while remanding the matter back to the original adjudicating au....
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....od specified in the first proviso, the stay order shall, on the expiry of that period, stand vacated.] (3) The Appellate Tribunal shall send a copy of every order passed under this section to the Collector of Central Excise and the other party to the appeal. (4) Save as provided in section 35G or section 35L, orders passed by the Appellate Tribunal on appeal shall be final. On fair reading of section 35C of the Act, the Appellate Tribunal is conferred with the power and has a wide discretion to pass such orders as it thinks fit, confirming, modifying, or annulling the decision or order appealed against or refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary. The terminology "directions" in the aforesaid provision cannot be restricted to the directions of the lower authorities to do de novo adjudication proceedings in a particular way and/or giving certain guidance to the adjudicating authority to pass a fresh order on merits, as sought to be contended on behalf of the petitioners. To read in....
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.... deposit partial amount of duty i.e. predeposit under Section 35F of the Act and to that the Allahabad High Court held that once the appeal was disposed of by quashing and setting aside the OIO, no such order of predeposit of any amount under Section 35F of the Act can be passed. The Allahabad High Court in the said decision had no occasion to consider the scope and ambit of power of the Appellate Authority to issue such direction under Section 35C of the Act. [6.2] Now, so far as the decision of the Madras High Court in the case of National Oxygen Limited (Supra) relied upon by the learned advocate on behalf of the assessee is concerned, on considering the reasoning given by the Madras High Court [Paras 16 to 18], with respect we are not in agreement with the view taken by the Madras High Court. As stated herein above, if it is held that while remanding the matter back to the original authority for de novo adjudication, the Appellate Tribunal cannot issue any direction of deposit of some amount before the case is considered on merits by the original authority to remand and the only direction which can be issued would be to do de novo adjudication proceedings in a particular way....
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....m of Rs. 50 lakh while remanding the matter to the original adjudicating authority for fresh adjudication and on such deposit there shall be a fresh adjudication is concerned, it is to be noted that in the present case the payment under the showcause notice for an amount of Rs. 3,52,81,421/+ interest + penalty and earlier the OIO was passed against which the petitioners assessee preferred appeal and there was an order of remand by the Appellate Tribunal for fresh adjudication and after giving an opportunity to the assessee to present their case before the final decision is taken and there was a specific observation and/or direction by the Appellate Tribunal that the appellants (assessee) shall cooperate with the Revenue in conducting verification to the correctness of the data submitted by them. On remand, when the original adjudicating authority passed an order which was submitted before the Appellate Tribunal, the adjudicating authority specifically observed that the petitioners are not cooperating with the Revenue in conducting verification of the document and that they have failed to furnish relevant documents proving their contention evidencing that they have nothing to prove ....