REVISION MECHANISM IN SERVICE TAX

[Dr. Sanjiv Agarwal]

Amendment made by Finance Act, 2012

Section 83 had been amended by the Finance Act, 2012 w.e.f. 28-5-2012 so as to insert section 35EE of Central Excise Act, 1944 to make it applicable in relation to Service Tax also. This has been done to make the revision mechanism prescribed in section 35EE of the Central Excise Act, 1944 applicable to service tax, to the extent possible. The entire section 35EE may not be applicable to Service Tax.

CBEC has explained the reason for introduction explained the revision mechanism in service tax on the lines of Central Excise Act, 1944 in Letter No. 334/1/2012-TRU, dated 16.03.2012 as under:

“At present in service tax, appeals against the order of commissioner (appeals) lie before the Tribunal; whereas in Central Excise, a revision mechanism is available to hear certain specified matters i.e. credit of any duty allowed to be utilized towards payment of excise duty on final products, rebate on exports. It is proposed that this revision mechanism may also be made available for service tax, to the extent applicable. Accordingly, Central Excise provisions relating to revision mechanism (Section 35EE of Central Excise Act) are being made applicable to service tax by amending Section 83”.

Generally, the appeal against the orders of Commissioner of Central Excise (Appeals) lies before the Appellate Tribunal (CESTAT) under section 86 of the Finance Act, 1994 (as amended). But, however with application of section 35EE of the Central Excise Act, 1944 (as amended) to the service tax, in certain matters, appeal against such orders may not lie before the Appellate Tribunal but before the revision authority prescribed by the Central Government. Revision Authority shall be an officer of the Central Government of the rank of a Joint Secretary who shall hear the revision application and pass orders as he deems fit on behalf of the Central Government.

As provided in section 35EE, appeals against all the orders of Commissioner (Appeals) shall lie before the Appellate Tribunal except in the following cases—

(i)  loss of goods in-transit or loss of goods in storage (factory or warehouse)

(ii) rebate of duty on goods exported or excisable goods used in manufacture of goods which are exported

(iii) goods exported without payment of duty.

Appeal in aforesaid matters does not lie with the Tribunal. In all other matters, appeal shall lie with Tribunal. This provision shall apply only in case of orders passed by Commissioner (Appeals) and not by Commissioner of Central Excise/Commissioner of Service Tax.

Revision application can be filed by any of the aggrieved person within three months of the communication of the order of Commissioner (Appeals). Thus, matters in relation to export of service or export refund/rebate may be subject to revision mechanism and may not be entertained by Tribunals after Finance Act, 2012, i.e., 28-5-2012.

Application for Revision

Under Central Excise, a revision application is filed in the following manner (which may be modified for service tax matters and notified later) –

a) Revision application is filed in prescribed form EA-8 in duplicate

b) It should be signed by the assessee (proprietor/partner of firm/karta of HUF/director or principal officer or authorized person in case of a company or body corporate)

c) It should be accompanied by two copies each of –

(i) order-in-appeal (against which revision is sought)

(ii) order in original (against which appeal was filed before Commissioner (Appeals)

d) Date of receipt in Revision Authority’s office shall be the date of submission of application

e) It should be accompanied by prescribed fee, i.e.,

Rs. 1000  :  if duty/interest demanded exceeds Rs one lakh.

Rs. 250   :   if duty/interest/penalty is less than Rs one lakh

No fee     :   if revision application is made by Commissioner of Central Excise.

f) Mode of fee payment has not been prescribed so it could be by way of Challan or demand draft.

g) Revision application should be filed within three months of the communication of order which can be extended by a further period of three months on showing sufficient cause.

h) Revision can also be sought by Commissioner of Central Excise, if he feels that Commissioner (Appeals) order is not proper. He can direct any officer to file the revision application.

i)  Central Government may refuse to admit revision application if the amount in question does not exceed Rs. 5000.

j)  Revision application should be submitted personally or by post to —

Under Secretary

Revenue Application Unit

Department of Revenue, Ministry of Finance

4th Floor, Jeevan Deep Building,

Sansad Marg, New Delhi – 110001

Central Government can also suo moto Revise

Under sub-section (4) of section 35EE, Central Government can also on its own motion , modify or annul the order passed by the Commissioner (Appeals). However, no time limit has been prescribed. However, if such notification proposes to enhance the penalty or fine in lieu of confiscation, a show cause notice must be issued to the parties within one year from the date of order sought to be annulled or modified [section 35EE(5)]. Also, where Central Government is of the opinion that any duty of excise has not/short levied, order enhancing the duty can not be made unless the affected person has been given notice to show cause against it [section 35EE(6)].

Appeal against Revisionary Order

There is no provision for appeal against the orders of Revisionary Authority and the remedy is filing of writ petition before any high court or supreme court.

Quasi Judicial Proceedings

Power of revision u/s 35EE are quasi judicial and hence principles of natural justice have to be followed and personal hearing is a must. Revisionary orders are not binding on Appellate Tribunal , as it is a quasi judicial authority. Also, order of Appellate Tribunal are not binding on the Central Government (Revisionary Authority) as Government has an independent jurisdiction.