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TMI Blog2016 (9) TMI 1138X X X X Extracts X X X X X X X X Extracts X X X X ..... e course of audit, the appellant furnished information, records, documents and copies of contracts/agreements, bills etc. as required by the authorities. After completion to audit, the Department issued a letter dated 04.12.2002 to the appellant stating that the activities of the appellant would fall within the ambit of Consulting Engineer and asked the appellant to pay service tax @ 5% of the gross amount realized from 7.7.1997 onwards. The appellant replied to the above letter of the audit party on 11.12.2002 stating that the activity and the nature of land surveyor is distinct and separate than the normal engineering service. Thereafter a show-cause notice dated 31.7.2003 was issued leveling the following allegations : (i) That the appellants are engaged in providing services in the field of civil engineer like topographical, hydrographical, geo-tech surveys and investigations, pipeline transportation studies, infrastructure development studies, design and consultancy for irrigation and water management, supervision and surveying in respect of highway construction, bridges and environmental impact studies; (ii) That these services come within the scope of consulting engineer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 6/99 ST dt. 9.4.1999. (h) That services in the nature design, consultancy and auxiliary were not taxable as held by the Tribunal in Daelim Industries, etc. (i) Insofar as pure consultancy services, the same was taxable. (j) As regards turnkey projects involving design consultancy work is concerned, the same was not taxable in the light of decision of State of Punjab v. Associated Hotels India Ltd., Daelim Industries Co. Ltd. V. CCE, L&T Ltd. v. CCE. (k) That the appellant was liable for payment of interest. (l) As regards penalties, in the light of developments made by the Finance Acts, and the Board Circulars bringing new service categories within the ambit of service tax net, there was reasonable cause and penalty was not imposed. 3.1. Based on the above findings, the original authority passed the following order : (i) Demand of service tax of Rs. 1,48,41,374/- was confirmed. (ii) A sum of Rs. 1,07,21,090/- already paid by the appellant was appropriated. (iii) Interest of Rs. 1,48,41,374/- at the applicable rate from the date on which it is payable till the date of payment was demanded. (iv) No penalty was imposed exercising the discretion ves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04) and tagged with the appeal of the assessee-appellant. 5. After the order of the Commissioner (Appeals), the Respondent-Commissioner proceeded to issue a review show-cause notice dated 10.12.2004 in exercise of powers under Section 84 of the Finance Act, 1994 proposing to review the Order-in-Original No. 14/2004 dt. 16.7.2004 passed by the Deputy Commissioner of Central Excise and a review show-cause notice was issued to the appellant and the appellant strongly contested the review show-cause notice on the following grounds : (a) The appellant contested the original adjudication order before the Commissioner (Appeals) and an Order-in-Appeal had been passed vide Order No.167/2004-CE dated 31.8.2004. The Original adjudication order had merged insofar as issues contested before the Commissioner (Appeals). Hence, the revisionary powers exercised by the Commissioner in review show cause notice were without authority. (b) That the adjudication order had merged with the appellate order of the Commissioner (Appeals) and the jurisdiction of the Commissioner under Section 84 of the Act ceased. Reliance was placed on the decision in CST v. Shri Amarjeet Singh, (1963) 14 STC 501 (MP). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work and consultancy and the decision of the Tribunal in Daelim Industrial co. Ltd. v. CCE, 2003 (155) ELT 457 (T) affirmed by the Supreme Court in 2004 (170) ELT A181 (SC) was rightly followed. Further, the review show cause notice made bald allegations and the details of the review made by the respondent were not forthcoming in the show cause notice. (i) That there was no suppression of facts warranting pressing into service the extended period of limitation under Section 73 of the Act. Reliance was placed on the decision in Calcutta Discount Co. Vs. ITO, 1961 (41) ITR 191 (SC) wherein it was held that as primary facts were within the knowledge of the Department, the assessee ws under no duty to disclose inferential facts or legal inferences which may be drawn from such facts. It was not the duty of the assessee to educate the assessing officer about the inferences of fact or law. (j) That no penalties could be imposed for the reason that there was no liability to pay service tax as purportedly made out in the review show cause notice. That there was no mens-rea or culpable mental state ont he part of the appellant. That the adjudicating authority had rightly exercised the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice and the assessee did not make any rebuttal, the penal provisions were attracted. On the basis of above findings, the following order was passed : (a) He confirmed service tax of Rs. 1,35,28,574/- under Section 73 (1) of the Act. (b) He demanded interest at the applicable rate under Section 75 of the Act. (c) He imposed penalty of Rs. 200/- per day as provided in Section 76 of the Act (d) He also imposed penalty of Rs. 1000/- as provided in Section 77 of the Act. (e) He imposed further penalty of Rs. 1,50,00,000/- under Section 78 of the Act for having suppressed value of taxable service with an intent to evade payment of service tax. 7. Aggrieved by the said order, the appellant is before the Tribunal. The appeal of the Department is against that segment which has been allowed by the Order-in-Appeal of the Commissioner (Appeals) and the appellant is against the order of the Commissioner s order of review show-cause notice passed under Section 84 of the Finance Act, 1994. 8. The learned counsel for the appellant submitted that the impugned order dated 30.11.2005 is not sustainable in law as the same has been passed ignoring the statutory provisions and the Board s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have the pecuniary jurisdiction to adjudicate a demand notice involving the amount more than Rs. 5,00,000/-. To support this submission, the learned counsel produced the Board s Circular No. 752/68/2003-CX dated 1-10-2003 which was in force during the relevant time, specifically restricts the power of the Deputy Commissioner for the purpose of adjudication demand notice involving an amount of more than 5 lakhs. This submission of the learned counsel has force and we find that when the adjudication order lacks jurisdiction then the review of the same by impugned order is also bad in law. Learned counsel further submitted that the impugned order is bad in law because all the services covered by the impugned order became taxable services only from 16.6.2005 by virtue of Finance Act, 2005 which introduced new services in relation to survey and map making services, the scope of which is also explained in the contemporaneous exposition i.e. Board Circular issued by Govt. of India, explaining the Budget changes of 2005. The service tax cannot be charged retrospectively as per the decision of the Hon'ble Supreme Court in the case of Govinddas Vs. ITO [1976 (103)ITR 123 (S.C.)] wherein the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions made by both the sides and perused the relevant materials on record. We find from the detailed submissions discussed above, the Deputy Commissioner lacks jurisdiction to pass the order and all the proceedings before him is void ab initio. Secondly, the order passed by the Deputy Commissioner is also bad in law as he did not have the pecuniary jurisdiction to pass adjudication order at the relevant time which is clear from the Board s circular dated 1.10.2003. Further, we also find that by Doctrine of Merger , the order passed by the Deputy Commissioner no longer survive and therefore, to review an order which does not exist in law is not permitted by law, more so when review order is passed much after order passed by the Commissioner (Appeals). We also find that the Department has also filed appeal against the Order-in-Appeal. In view of these facts and circumstances, we are of the considered opinion that the impugned order is bad in law and we set aside the same. We are also of the opinion that there is no merit in the Department s appeal filed against the Order-in-Appeal. 11. In view of the above discussion, we set aside the impugned order by allowing the appeal of ..... 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