COMMISSIONER SERVICE TAX Vs. L R SHARMA

JUDGEMENT

(1.) THIS is an appeal against an order of the Central Excise and Service Tax Appellate Tribunal ("CESTAT"), which accepted the assessee's objections to an order authorizing the filing of an appeal under Section 86(2) of the Finance Act, 1994 ("the Act"). Section 86 introduced the facility of an appeal to the CESTAT, stating:

(2.) THE Committee of the Chief Commissioners may ­ under Section 86 (2) - direct that an order passed under Sections 73 or 83A be appealed to the CESTAT. The present case, involves the legality of the exercise of this power. The Respondent (LR Sharma) provides services relating to replacement of water pipelines for the Delhi Metro Rail Corporation, Delhi Jal Board and other entities, but was not paying service tax according to the provisions of Section 65(39a) of the Finance Act, 1994. On Commissioner of Service Tax ("the 15.10.2010, the Commissioner") issued a show cause notice to the Respondent asking why an amount of Rs.22,60,09,148, leviable under Sections 66, 67 and 68, of the Act should not be recovered on account of services provided by the Respondent. Other demands too were made in the show -cause notice. The show -cause notice was adjudicated subsequently by the Commissioner, who, by an order dated 24.4.2012, dropped the proceedings and discharged the Respondent. A review order was then passed by the Committee of Chief Commissioners under Section 86(2) of the Act, to file appeal the matter to the CESTAT.

(3.) THE assessee had argued before the CESTAT that the order under Section 86(2) was bad in law because (a) there was no meeting between members of the Committee; (b) the order was prepared by the subordinate officers to which the concerned Chief Commissioners merely appended their signatures without independently considering the matter, or deliberating upon the issue. The CESTAT dismissed the first objection on the strength of the decisions in Commissioner of Central Excise v. ITC Limited, 2008 (221) ELT 331 (Kar.) and Commissioner of Central Excise v. Kundalia Industries, 2012 (279) ELT 351 (Del), holding that there is no statutory requirement of a physical meeting, but only a consensus ad idem on the issue. However, the CESTAT held in favour of the Respondent on the second issue, holding that there was no application of mind. The findings of the CESTAT on this issue were as follows: