Service Tax Rebate - Appeal Lies to Govt, not CESTAT?
CLAUSE 115 of the Finance Bill 2015 proposes to insert the following two provisos in Section 86 (1) of the 1994 Act (Service Tax).
"Provided that where an order, relating to a service which is exported, has been passed under section 85 and the matter relates to grant of rebate of service tax on input services, or rebate of duty paid on inputs, used in providing such service, such order shall be dealt with in accordance with the provisions of section 35EE of the Central Excise Act, 1944:
Provided further that all appeals filed before the Appellate Tribunal in respect of matters covered under the first proviso, after the coming into force of the Finance Act, 2012, and pending before it up to the date on which the Finance Bill, 2015 receives the assent of the President, shall be transferred and dealt with in accordance with the provisions of section 35EE of the Central Excise Act, 1944.".
WHY? And what does it propose to achieve?
That's a long story.
The Central Excise appellate mechanism is a very complicated maze which is beyond the comprehension of high profile lawyers, wise judges of the High Courts, even wiser judges of the Supreme Court and the wisest of them all - the all knowing Superintendent of Central Excise whose erudition gets the stamp of approval of all the wise officers of the Department. But of course the assessee is expected to be a master on the subject.
Under Section 35EE of the Central Excise Act, in respect of orders passed by Commissioner (A) relating to transit loss, rebate or export without payment of duty, the appeal lies to the Central Government - the Revision Authority, and not to the CESTAT.
As per Section 83 of the Finance Act, 1994, certain sections of the Central Excise Act are made applicable so far as may be, in relation to service tax as they apply in relation to a duty excise.
Section 35EE is one such section made applicable to Service Tax. But this has been made applicable only with effect from 28.05.2012 by Finance Act 2012. (please note the proposed amendment is effective from this date)
As per Section 86 of the Finance Act 1994, an appeal can be made to the CESTAT against an order passed by the Commissioner(A).
Is there a conflict between Section 83 and Section 86? Which one would prevail? In Service Tax rebate matters where should one go in appeal - to the Tribunal or the Revision Authority?
Under Central Excise, Section 35B bars an appeal to the Tribunal in respect of transit loss, rebate or export without payment of duty; but there is no such bar under Service Tax.
So there was/is confusion as to where the appeal should be filed in cases relating to service tax rebate.
This is sought to be solved by the proposed amendment. This amendment has retrospective effect from the coming into force of the Finance Act, 2012 and the Bill does not mention that date. You are supposed to search and find that date. Any way for the exclusive use of TIOL readers I will let you know the secret - it is 28.05.2012.
Now the appeals in such cases will be to the Revision Authority and not CESTAT and all cases pending in the CESTAT will be transferred to the Revision Authority. Who will transfer the files? CESTAT Benches are located in six cities; will the Revision Authority go to all these benches and collect the pending cases? The CESTAT is already without much infrastructure and staff - can it be burdened with sorting out all these cases and transferring them to the Revision Authority? Is this exercise necessary? At least why can't the pending cases continue with the CESTAT? Why should the poor assessees and the Tribunal be put to so much inconvenience? Why can't they do it prospectively?
WHY? WHY?
I will tell you why, it is because of the sheer contempt the babus have for the judiciary and the rage the babus feel when their ineptly drafted laws are questioned/quashed by the courts. In spite of what Mr. Jaitley pronounces publicly, his babus have got him to present to Parliament a retrospective legislation which is absolutely of no use to the Government, except telling the Courts, "if you quash our badly drafted laws, we will bring them with double vigour and retrospectively”. What can a poor Finance Minister do against the might of the babus?
And they don't even tell the Parliament why they want this retrospective legislation.What they failed to do in 2012, they are trying to correct now retrospectively.