2025 (7) TMI 146 - AT - Service Tax

Refund claims as per N/N. 05/2006-CE dated 14.03.2006 - Export of Service - period from January 2007 to December 2007 - HELD THAT - The learned Commissioner (A) after analyzing various services in the context of exports made by the respondents remanded the matter on the ground that the claims have to be verified in the light of the Chartered Accountant certificate issued by the Board vide Circular dated 19.01.2010 and observing that all the issues be decided in the light of the Circular except for certain input services viz. Annual Day Celebration Conference and Event Management Service Employees background verification Radio Programming Induction Training Charges Electronic articles Pest control service job portal access charges and company law and Secretarial practice service etc. There are no discrepancy in the observation of the learned Commissioner (A) in remanding the matter to the adjudicating authority to ascertain the facts without which refund cannot be decided. This Tribunal in the case of CCE vs. M/s. Tantia Industries Ltd. 2024 (5) TMI 1588 - CESTAT BANGALORE following the earlier decision of this Tribunal rendered in the case of CCE Meerut-II vs. HAS Chadha Exports 2012 (7) TMI 168 - CESTAT NEW DELHI wherein it has observed that the Commissioner (Appeals) did not exceed his jurisdiction by remanding the issue of undervaluation to the adjudicating authority. The impugned order is upheld and the Revenue s appeals are dismissed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal question considered by the Tribunal was whether the learned Commissioner (Appeals) had jurisdiction and power to remand the matter back to the adjudicating authority after the amendment to Section 35A of the Central Excise Act, 1944, specifically in the context of refund claims relating to export of services. The Revenue challenged the remand order on the sole ground that the Commissioner (Appeals) no longer possessed the authority to remand and was instead required to decide the appeal on merits.

2. ISSUE-WISE DETAILED ANALYSIS

Issue: Jurisdiction and power of the Commissioner (Appeals) to remand the matter post-amendment to Section 35A of the Central Excise Act

Relevant legal framework and precedents: The Tribunal examined Section 35A(3) of the Central Excise Act, 1944, as amended in 2001, which states that the Commissioner (Appeals) "shall, after making such further inquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against." The wording of this provision was noted to be identical to Section 128(2) of the Customs Act, 1962, which confers similar powers on the first appellate authority under the Customs regime.

The Tribunal relied heavily on the Supreme Court's interpretation in Union of India v. Umesh Dhaimode, where the apex court held that the appellate authority's power to "pass such order as it deems fit" includes the power to remand the matter to the lower authority for fresh decision. The Supreme Court reasoned that an order of remand necessarily annuls the decision under appeal and that the power to annul and remand is implicit in the appellate authority's jurisdiction.

Additionally, the Tribunal referred to its own prior decisions, including CCE vs. M/s. Tantia Industries Ltd. and CCE, Meerut-II vs. HAS Chadha Exports, which affirmed the principle that the Commissioner (Appeals) retains the power to remand matters for further inquiry and fact-finding.

Court's interpretation and reasoning: The Tribunal interpreted the statutory language of Section 35A(3) strictly and in harmony with the Supreme Court's ruling. It concluded that the phrase "pass such order as he thinks just and proper" is broad and inclusive, permitting remand orders. The Tribunal emphasized that remand is a procedural device to ensure proper adjudication when facts require verification or further inquiry.

Key evidence and findings: The Commissioner (Appeals) had remanded the matter to the adjudicating authority to verify facts in light of a Chartered Accountant certificate and a Board Circular dated 19.01.2010, specifically regarding certain input services claimed as refunds under Notification No. 05/2006-CE. The Tribunal found no discrepancy in this approach, noting that the refund claims could not be decided without ascertaining the relevant facts.

Application of law to facts: Applying the legal framework, the Tribunal found that the Commissioner (Appeals) acted within jurisdiction by remanding the matter for further inquiry. The remand was necessary to properly verify the claimant's entitlement to refund under export of service provisions. The Tribunal rejected the Revenue's contention that the Commissioner (Appeals) must decide the appeal on merits without remand.

Treatment of competing arguments: The Revenue argued that post-amendment, the Commissioner (Appeals) lost the power to remand and must decide appeals themselves. The Tribunal dismissed this argument, relying on binding Supreme Court precedent and consistent Tribunal decisions. It held that the power to remand is inherent in the appellate jurisdiction and is not excluded by the amendment.

Conclusions: The Tribunal upheld the remand order of the Commissioner (Appeals) as valid and within jurisdiction. It dismissed the Revenue's appeal challenging the remand on jurisdictional grounds.

3. SIGNIFICANT HOLDINGS

The Tribunal preserved the following crucial legal reasoning verbatim from the Supreme Court's decision in Union of India v. Umesh Dhaimode:

"As the order under appeal itself notes, the aforesaid provision vested the appellate authority with powers to pass such order as it deemed fit confirming, modifying or annulling the decision appealed against. An order of remand necessarily annuls the decision which is under appeal before the appellate authority. The appellate authority is also invested with the power to pass such order as it deems fit. Both these portions of the aforesaid provision read together, necessarily imply that the appellate authority has the power to set aside the decision which is under appeal before it and to remand the matter to the authority below for fresh decision."

The core principles established include:

• The Commissioner (Appeals) under Section 35A(3) of the Central Excise Act retains the power to remand matters to the adjudicating authority for further inquiry and fact-finding.
• The power to remand is inherent in the appellate authority's jurisdiction to "confirm, modify or annul" decisions.
• Remand orders are procedural tools to ensure just and proper adjudication, especially where factual verification is necessary.
• Amendments to Section 35A do not curtail the Commissioner (Appeals)'s power to remand.

Final determinations on the issue:

The Tribunal upheld the remand order passed by the Commissioner (Appeals) and dismissed the Revenue's appeal challenging the jurisdiction to remand. The matter was rightly sent back to the adjudicating authority for verification of facts essential to decide refund claims relating to export of services.