Bar on Remand by Commissioner (Appeals) - Not applicable to Service Tax?
THERE is a widespread opinion that even if remand by Commissioner (Appeals) is not allowed under Central Excise and Customs, there is no such bar under Service Tax. As per Section 85(4) of the Finance Act 1994:
"(4) The Commissioner of Central Excise (Appeals) shall hear and determine the appeal and, subject to the provisions of this Chapter pass such orders as he thinks fit and such order may include an order enhancing the service tax, interest or penalty:
It is argued that the ‘orders as he thinks fit' includes an order of remand.
Last week, the Gujarat High Court delivered an important judgement on this issue.
The short question before the High Court was, whether the Commissioner (Appeals) exercising powers under section 85 of the Finance Act, 1994 has the power to remand the proceedings back to the adjudicating authority.
The High Court held:
Under sub-section (4) of section 85 of the Finance Act, 1994, the Commissioner (Appeals) hearing the appeals can pass such orders as he thinks fit and such orders may include an order enhancing the service tax, interest or penalty. Proviso to sub-section (4) provides that no order enhancing the service tax, interest or penalty shall be made without affording a reasonable opportunity to the person affected. Sub-section (5) of section 85 provides that subject to the provisions of the said Chapter, in hearing the appeals and making orders, the Commissioner shall exercise the same power and follow the same procedure as he exercises and follows in hearing the appeals and passing orders under the Central Excise Act, 1944.
In plain terms, sub-section (4) of section 85 of the Finance Act, 1994 is worded widely and gives ample powers to the Commissioner while hearing and disposing of the appeals to pass such orders as he thinks fit including an order enhancing tax, interest or penalty. Such powers would, therefore, inherently contain the power to remand a proceeding for proper reasons to the adjudicating authority. In absence of any specific bar in this respect, the appellate powers flowing from sub-section (4) of section 85 would clothe the Commissioner (Appeals) with power to even remand the proceedings. If proper inquiry is not conducted or the proceedings is decided ex parte, it would not be necessary in every case that the Commissioner (Appeals) converts himself to the adjudicating authority and conducts the entire inquiry necessary for proper adjudication of the issues. In such a case, the Commissioner (Appeals) may as well decide to remand the proceedings, and we see no limitation on his powers to do so.
So, it is emphatically held that in Service Tax matters, the Commissioner (Appeals) can remand the matter to the Adjudicating Authority.
If Service Tax cases can be remanded, what is the harm/bar in remanding Central Excise and Customs cases? Even those laws do not specifically bar remand - only history records that the power to remand has been taken away - the Statutes do not emphatically mention that.
Is it necessary to have such protracted litigation on such a simple issue - for more than a decade? It all happened because of the poor drafting skills of the babus. If they wanted to do away with the remand powers, they should have clearly mentioned in the Statutes that the powers of the Commissioner(Appeals) to pass such orders as he thinks fit does not include the power to remand.
In the last ten years, instead of wasting the precious time of the Courts and Tribunals on such silly issues, they should have amended the laws, if they are serious about the issue or they should have simply accepted the fact that remand is a necessity and continued with life.
In this case, what was the need for the Revenue to take the matter to the High Court? After all heavens are not going to fall if a Commissioner (Appeals) in a rare case remands the matter to the lower authority.