TMI Blog2008 (10) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,92,86,475/- (Rupees Two Crore Ninety Two Lakhs Eighty Six Thousand Four Hundred and Seventy Five only) and proposing penal action under Section 76, 77 and 78 of the Finance Act, 1994. By the impugned order the said Commissioner has held that the impugned show cause notice issued to the Respondents fails on the limited ground of jurisdiction and he has thus disposed of the same as without jurisdiction . The Department has filed the present Appeal on the basis of an authorization issued by the Committee of Chief Commissioners holding that the impugned order is not legal, proper and correct. A Cross Objection has been filed by the Respondents against the Appeal filed by the Department. 3. We find that the impugned order has been passed merely holding that Bhubaneswar-II Commissioner has no jurisdiction in the matter, without going into the merits of the case. The learned Jt. CDR in his arguments before the Tribunal has also not argued on the merits of the case. Hence, though the Respondents in their Cross Objection as well as in their arguments before us have touched upon the merits of the case, we refrain form expressing any opinion on the merits of the case as the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 (T)]. Now we find that the present Appeal has been filed by the Department subsequently on 31-8-2007 against the very same earlier order of the Commissioner dated 30-5-2007. The issue raised now is of far reaching importance and hence requires detailed analysis. 7. Service Tax is an indirect tax like the customs duty, excise duty and sales tax etc. In the case of customs duty, the incidence of such duty is on goods imported into India or exported from India. The importer or the exporter is liable to pay the customs duty. The Registered Office of the importer or exporter may be located anywhere, but normally the customs official in whose territorial jurisdiction the import or export takes place has the power to adjudge the duty unless some other official is specially assigned jurisdiction over a particular case of import or export. In the case of excise duty, the incidence of levy is on the goods manufactured. The manufacturer who is liable to discharge the duty liability may have his registered office in another place, but there is no doubt that the excise officials in whose territorial jurisdiction, the manufacture of the goods takes place are competent to adjudge the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction in the state of Jharkhand. The presumption behind the arguments advanced by the Department appears to be that since the Respondents have their Head Office at Barbil in Orissa, they are subject to Commissioner, Bhubaneswar-II's territorial jurisdiction. In other wards, the location of the service provider according to the Department determines the jurisdiction and not where the service is provided giving rise to the incidence of service tax. 11. We find that when service tax was brought into force for the first time in 1994, an Order No. 1/1/94, dated 29-6-1994 was issued under Rule 3 of the Service Tax Rules, 1994. The said Rule 3 reads as under:- Rule 3. Appointment of officials. - The Central Board of Excise and Customs may appoint such Central Excise Officers as it thinks fit for exercising the powers under Chapter V of the Act within such local limits as it may assign to them as also specify the taxable service in relation to which any such Central Excise Officer shall exercise his powers. 12. This Rule empowers the Board to appoint such Central Excise officers for exercising the powers under the Service Tax Law within such local limits as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Collector of Central Excise, Calcutta-I having jurisdiction - (a) in the districts of Calcutta, South 24-Pargartas and North 24-Parganas (excluding Barrackpore sub-division of North 24-Parganas District) of the State of West Bengal; and (b) in the districts of Howrah, Midnapur and Hooghly and Barrackpore sub-division of North 24-Parganas district, of the State of West Bengal and in the Union Territory of the Andaman and Nicobar Islands. (i) Chairman-cum-Managing Director of the National Insurance Co. Ltd., Calcutta (ii) All Stock Brokers within the jurisdiction of Col. 2 (iii) Any other assessee within the territorial jurisdiction of Col. 2. 2. In relation to all other assesses, Collector of Central Excise will have the jurisdiction as defined in sub-rule (ii) of Rule 2 of Central Excise Rules, 1944. 3. The provisions contained in sub-rule (ii)(a) and sub-rule (viii)(a) of Rule 2 of Central Excise Rules, 1944 in relation to the meaning of Collector (Appeals) and Principal Collector respectively also will apply to matters relating to Service Tax. 4. This Order shall come int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd where the incidence of service tax occurs. It appears to us that a person located in one place may be providing taxable services in the territorial jurisdiction spread over several states, but a deliberate provision has been made to bring all the taxable services provided by an assessee under one Commissioner within whose territorial jurisdiction the assessee is located. Such a provision also appears to facilitate ease of collection and control. 17. Shri Kartik Kurmy, learned Advocate states that the Commissioner, Jamshedpur has also issued a show cause notice dated 7-8-2008 to the Respondents covering the same period of dispute claiming jurisdiction over the Respondents. He has also submitted a copy of the said show cause notice. In this regard our considered view is that the Service Tax Order No. 1/1/94, dated 29-6-1994 does not envisage two Commissioners having concurrent jurisdiction over the same assessee. In our view the Commissioners in whose territorial jurisdiction an assessee's registered office is located can only exercise jurisdiction for service tax purposes in terms of said Service Tax Order No.1/1/94. 18. Shri Kartik Kurmy, learned Advocate for the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had signed the Review Order in that case were not appointed as Chief Commissioners of Central Excise by notification in the Official Gazette as required under the law and hence we hold that they did not have the Authority to carry out statutory review and for such lack of jurisdiction, the Appeals filed pursuant to such Review Orders were dismissed by us. In a subsequent case, relating to Bhubaneswar-II jurisdiction in CCE-BBSR-II v. M/s. Mahanadi Coalfields Ltd. (S.T. Ap. 147/08), we have also dismissed a similar Appeal as we found that the concerned officials who passed the Review Order were not legally appointed as Chief Commissioners of Central Excise, Bhubaneswar and Ranchi jurisdictions respectively. One of them namely Shri Amar Singh who had signed the Review Order in the said case as Chief Commissioner, Ranchi has also signed the present Review Order as Chief Commissioner, Ranchi. It was examined in that case that Shri Amar Singh has been only posted as Chief Commissioner by an Office Order No. 186/2007 dated 26-7-2007 and not through a notification in the Official Gazette as required under the excise law. Consequently, in this case also we are of the prima facie view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) Non-issue of Notification under Rule 3(1) of the Central Excise Rules cannot denude any central excise officer of the powers/responsibilities vested upon him by the parent Central Excise Act which defines central excise officer under Section 2(b) of the Act. (v) Notification under Rule 3(1) would only be necessary in the public interest if an officer of the State Government or any other person outside the central excise Department is invested by the Board with powers of central excise officer under the Act. (vi) The word 'may' in Rule 3(1) cannot be construed as 'shall'. (vii) If Chief Commissioners did not exist in the eye of law because of non-issue of appropriate Notifications, all orders including assessment orders passed by central excise officers would become non-est for the same reason. Such a view will be detrimental to public revenue interest. (viii) Not notifying Chief Commissioners in the Official Gazette does not put tax payers in any disadvantageous position. (ix) Issuing Notifications under Rule 3(1) is merely in the nature of an executive act and it does not matter if such acts are done by issuing office orders or by issuing no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ications as required under the law. 25. We find that under the ST Order No. 1/1/94 the Board has appointed central excise officers by designation for the purposes of assessment and collection of service tax and with reference to their jurisdiction defined in the Central Excise Rules. Rule 3 of the Central Excise Rules, 2002 reads as under:- Rule 3. Appointment and jurisdiction of Central Excise Officers. - (1) The Board may, by notification, appoint such person as it thinks fit to be Central Excise Officer to exercise all or any of the powers conferred by or under the Act and these rules. (2) The Board may, by notification, specify the jurisdiction of a Chief Commissioner of Central Excise, Commissioner of Central Excise or Commissioner of Central Excise (Appeals) for the purposes of the Act and the rules made thereunder. (3) Any Central Excise Officer may exercise the powers and discharge the duties conferred or imposed by or under the Act or these rules on any other Central Excise Officer who is subordinate to him. The expression 'Central Excise Officer' in Rule 3(1) and in Rule 3(3) has to be read in the light of the definition contained in the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appointed and invested with the power by appropriate notification and by the procedure not known to law, all his acts done under the law becomes non-cognizable and ab initio void. (3) Competent Authority v. Baranagar Jute Factory - 2005 (13) SCC 477 Where the statute requires an act to be done in a particular manner, the same has to be done in that manner alone. (4) Sushil Kr. Mehta v. Gobind Ram Bohra - 90 1 SCC 193 : Lack of jurisdiction cannot be cured by consent or waiver. (5) Moli Another v. State of Kerala - (2004) 4 SCC 584 : The question relating to lack of jurisdiction is a pure question of law which can be raised in the appellate Court even if not raised before the Courts below. (6) Karan Singh Others v. Chaman Paswan - 54 SC A 725 : A decree passed by the Court without jurisdiction is a nullity and its validity could be set up whenever and wherever it is sought to be enforced or relied upon even at the stage of execution and even in co-lateral proceedings. (7) Marathwada University v. Seshrao Balwantrao Chawan - (89) 3 SCC 132: When statute prescribes a particular body to exercise a power it must be exercised by that body al ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
