TMI Blog2008 (11) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... vision under Section 84 of the Finance Act, 1994 to the extent the order of Adjudicating Authority was found to be erroneous by him and about which no appeal lay at the instance of Revenue notwithstanding that to the extent the assessee was aggrieved, he had preferred the appeal and the order in appeal has been passed. 3. The necessary facts are, that the assessee was issued show cause notice for short/delayed payment of service tax for the quarter ending September, December, 2000, March, June, September and December, 2001 and quarter ending March, 2002. The necessary adjudication was made vide order in original dt. 16.10.2003, whereby the demand of service tax was confirmed, and penalty under Section 76 was imposed. Aggrieved by the said order the assessee preferred appeal before the Commissioner (Appeals), who vide order in appeal dt. 13.10.2004, upheld the order in original. Accordingly the assessee discharged the liability, and deposited the amount of penalty. 4. The Commissioner of Central Excise, thereafter, in purported exercise of powers vested in him under Section 84 issued show cause notice to the assessee on 12.8.2005, informing that he would like to review th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 84 can be passed by the Commissioner in respect of any issue, if an appeal against such issue is pending before the Commissioner of Central Excise (Appeals), and by reading this provision he means to convey, that the merger shall be only with respect to issue which is raised in the appeal, and regarding other aspects the power under Section 84 can very well be exercised, as in that regard there is no merger. Then, learned counsel for the Revenue read to us the judgment of the Hon'ble Supreme Court in Kunhayammed Ors. Vs. State of Kerala reported in 2001 (129) E.L.T. 11 (S.C.) = (2000) 6 SCC 359, where the Hon'ble Supreme Court has considered the aspect of merger, as to when it would be attracted, and when it will not be attracted, and after discussing the matter thread bare, and considering various previous judgments, in para-44 had drawn conclusions, which we may gainfully quote. Since conclusions no. (iv), (v), and (vi) are not relevant for the present purpose, only conclusions no. (i), (ii), (iii) and (vii) are being quoted, which read as under:- (i) Where an appeal or revision is provided against an order passed by a court, tribunal or any other authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. In that case the facts were, that there were cross appeals; one by the assessee, and the other by the Revenue. The assessee challenged the entire order, and the Revenue challenged only reduction of penalty. The assessee's appeal was ordered to be struck off the register for non compliance of the Tribunal's pre-deposit order. Then, later on the Revenue's appeal was also dismissed. Thereafter the assessee filed an application for restoration, and submission was made, that after dismissal of the Revenue's appeal, the assessee's appeal was not maintainable, as consequent upon dismissal of the Revenue's appeal the impugned order of Commissioner got merged. This submission was negated, by holding that the Revenue's appeal was restricted to the reduction of the penalty amount by the Commissioner, whereas the assessee's appeal challenged the entire order of the Commissioner. Learned counsel then relied upon a judgment of Calcutta High Court, in Hindustan Aluminium Corporation Ltd. v. Commissioner of Income-tax reported in 178 ITR-74, wherein the Division Bench of the Calcutta High Court held, that the doctrine of merger is not a doctrine of rigid and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also relied upon yet another judgment of the Tribunal, in Commissioner of Central Excise v. Bhagwati Ispat Ltd. reported in 2002 (146) E.L.T. 221, wherein it was held, that in appeal the final order had already been passed by the Tribunal prior to the order passed in review by the Commissioner, and in view of the earlier order having already merged in the final order of the Tribunal, the appeal filed by the Revenue was held to be not maintainable. Learned counsel then relied upon larger Bench judgment of the Tribunal Delhi, in Commissioner of Central Excise v. L.M.L. Ltd. reported in 2002 (143) E.L.T. 431, wherein again the assessee filed appeal before the Tribunal against the order of the Commissioner imposing penalty while not confirming the demand of duty, which appeal was allowed, holding that when there is no duty demand, there could be no penalty. However, the Revenue pursuant to order in review passed by the Commissioner, in exercise of its power under Section 35(2) of the Central Excise Act, 1944 filed appeal before the Tribunal, against the same order, and much after the decision of the Tribunal, the Board itself sought to review on the appeal filed by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was in issue before it. It may be noticed here, that the order in original imposed a penalty lesser than the one which according to the Department was required to be imposed, and the penalty as imposed was challenged. It is well nigh possible, that in appeal the Commissioner (Appeals) could have set aside the order altogether, or could have reduced it as well, while maintaining imposition of penalty, may be rightly, or wrongly. Therefore, on the parameters laid down in conclusion no. (iii), by Hon'ble the Supreme Court, the superior jurisdiction was capable of reversing, modifying, or affirming the order which was in issue before it, and in the present case the learned Commissioner (Appeals) declined to modify, and simply affirmed. 12. We are not inclined to subscribe to the view as propounded before us, that since this was not precisely prayed in the appeal, even by way of alternative prayer, that the penalty be further reduced, there could be no merger. This would be too far fetched a proposition to be accepted by us. The judgments in CCE, Madurai v. Chellapandi Match Works reported in 2006 (197) ELT 272, Commissioner of Central Excise v. Bhagwati Ispa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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