ST - Order passed in remand - No precedent for Commissioner to have passed strictures against Tribunal nor any authority for such insubordination to appellate jurisdiction: CESTAT
By TIOL News Service
NEW DELHI, SEPT 05, 2013: IN remand proceedings the Commissioner of Service Tax, Delhi passed an o-in-o confirming the Service Tax demand of Rs.80,75,236/- and imposed penalties and interest.
The appellant is before the CESTAT and submits that the adjudicating authority in gross defiance of the specific and unambiguous directions of this Tribunal proceeded to pass a flippant and laconic order in total abdication of quasi-judicial obligations and in defiance of the hierarchical discipline. It is also submitted that the impugned adjudication order is totally bereft of any analysis or recording of reasons and discloses a casual approach by the adjudicating authority.
The Bench, therefore, took a closer look at the order and observed -
+ The adjudication order consists of 28 paragraphs running over 15 printed pages.
+ Paragraphs 1 to 12 set out the preceding events namely, the earlier adjudication proceedings culminating in an order which was challenged before this Tribunal in the earlier round of litigation.
+ Paragraph 13 states that personal hearing was afforded on 23.11.2011.
+ Paragraph 14 which occurs in the part labelled "Discussions and Findings" is formal in nature and records that the adjudicating authority had gone through the show cause notice, the earlier adjudication order; and directions of this Tribunal dated 12.5.2011; the reply of the appellant herein; submissions made during personal hearing; and all the material produced.
+ Paragraph 15 sets out the issues for determination and faithfully records the directions by this Tribunal, set out in paragraph 10 of our earlier order dated 6.5.2011.
+ Paragraph 16 again summarizes the history leading to the present adjudication. This paragraph also records a clear refutation, by the adjudicating authority of the conclusions of this Tribunal. The adjudicating authority observes - "...I find no infirmity or slackness in the order passed by my colleague. The issues which were not discussed in the said OIO were not alleged in the SCN. All the allegations leveled in the SCN are discussed and the findings were given on the basis of the reply furnished by the assessee. The adjudicating authority cannot go beyond the allegations leveled in the SCN. The relevant paras of the findings of the OIO dated 1.2.2010 is reproduced below which appears to be reasonable":"
The Bench also observed that Paragraphs 17 to 20 of the order being appealed against reproduces (verbatim) the paragraphs 15 to 18 of the earlier (invalidated) adjudication order dated 01.02.2010.
As for the case laws relied upon by the appellant, the adjudicating authority had observed -thus:
"It is settled law that cases are decided on merit and facts of individual case. The Rule of precedence is not applicable where the facts are entirely different from the facts of the case relied upon and the issues have been judiciously examined. The cases relied upon by the noticees are not applicable in the facts and circumstances of the present case."
The CESTAT also noted -
"14. Paragraph 22 selectively paraphrases the earlier remand order passed by us and ends with the observation, that this Tribunal might have found some flaw in the earlier adjudication order dated 1.2.2010, but surprisingly "without any request either by the departmental representative or by the representative of the assessee, the CESTAT remanded for fresh adjudication".
All these findings of the adjudicating authority came in for harsh criticism by the Bench which observed -
"15. We find no precedent for the ld. Commissioner to have passed strictures against the Tribunal nor any authority for such brazen insubordination to the appellate jurisdiction and without comprehension of the limitation of his jurisdiction and the limits of his authority. In para 23, in further refutation of the judgment of this Tribunal, the adjudicating authority now holds that the earlier adjudication order was a well-reasoned and a just and legal order, again overruling this Tribunal's judgment. The impugned order also concludes that no evidence is emerging from the discussion, and the allegations leveled in the show cause notice were categorically discussed in the earlier adjudication order, passed by his 'learned' predecessor. In para 25, the adjudicating authority reaffirms the findings in the earlier adjudication order, with regard to suppression of material facts with an intent to evade payment of service tax. Paragraphs 26 and 27 reaffirm the correctness of the earlier adjudication order and in para 28, confirmation of service tax, interest and penalty is recorded.
16. On a careful analysis of the adjudication order, we find that the ld. Commissioner has wholly misconceived the limits of his jurisdiction pursuant to the specific order of remand passed by this Tribunal, vide the judgment dated 6.5.2011 and has tried to overreach and trench into the domain of this appellate authority. The impugned adjudication order is also wholly bereft of independent analysis and determination of the issues raised. There is neither any analysis nor discussion on the elaborate written submissions filed by the assessee on 28.7.2011 nor of the precedents referred to or cited during the course of personal hearing. The approach towards this critical quasi-judicial function is laconic, casual, flippant and wholly negligent. No speaking order was passed recording independent reasons, despite the direction in the judgment of this Tribunal in para 12 of the earlier judgment, to do so."
The CESTAT, therefore, quashed the adjudication order as unsustainable and remanded the matter to the Commissioner, Service Tax, New Delhi for passing a fresh adjudication order, in strict compliance and fidelity to the earlier judgment of the Tribunal.
Lucky escape: Incidentally, in an almost similar case of Vandana Dyeing P. Ltd. - (2011-TIOL-739-CESTAT-MUM) the Bench presided by the then President had recommended disciplinary action against the adjudicating authority and directed the Registrar to forward a copy of the order to the Revenue Secretary and the Chairman of the Board. What happened thereafter, we do not know!
(See 2013-TIOL-1316-CESTAT-DEL)
