1. M/s. Markfed Oil & Allied Industries have filed this Appeal against the Order dated 14-12-2001 passed by the Commissioner of Central Excise in exercise of powers under Section 84 of the Finance Act, 1994.
2. Shri K.K. Anand, learned Advocate, submitted that as per Rule 2(d)(l) xvii of Service Tax Rules, 1994, a person liable to pay freight in relation to the service provided by the goods transport operators was liable to pay the service tax with effect from 16-11-97; that the Supreme Court in the case of Laghu Udyog Bharti v. UOI -1999 (112) E.L.T. 365 held the said goods ultra vires of the Finance Act, 1994; that the Superintendent had issued a show cause notice dated 12-5-99 directing them to show cause as to why the penalty under Section 77 of the Finance Act may not be levied on account of their failure to file the returns of the service tax; that the Deputy Commissioner under Order dated 14-12-2001 dropped the proceedings in terms of Supreme Court decision in Laghu Udyog Bharti case; that subsequently, the Parliament validated certain actions taken under Service Tax Rules under Section 117 of the Finance Act, 2000 retrospectively; that the Commissioner thereafter revised the Order passed by the Deputy Commissioner under impugned Order in exercise of powers under Section 84 of the Finance Act, 1994, directing them to calculate and supply the gross freight figures for the period 16-11-97 to 2-6-98 and deposit the service tax at the rate of 5 % of gross freight weight. They had also been directed to file the service tax returns for the period 16-11-97 to 2-6-98. The learned Advocate, further, submitted that the power of revision can be exercised by the Commissioner only with regard to proceedings which were initiated by the officers subordinate to him; that the only issue taken up by the Deputy Commissioner under the adjudication order was with regard to imposition of penalty under Section 77 for not filing the returns under Section 70 of the Finance Act, 1994; that there was no proposal in the show cause notice for levy of service tax or interest; that there was also no adjudication on these issues by the Deputy Commissioner and accordingly these issues cannot be taken up in revision. He relied upon the decision of Punjab and Haryana High Court in the case of State of Haryana v. Dasaunda Singh/Waryam Singh, 1996 (103) STC 128, wherein it was held that the Revisional Authority can interfere in exercise of Revisionary powers to examine the legality and propriety to proceedings or the orders passed therein only and if no penal proceedings have been initiated, the question of examining the legality or propriety thereof does not arise.
The learned Advocate, therefore, contended that the Commissioner cannot direct them to pay the service tax and interest thereto in exercise of powers under Section 84 of the Finance Act, 1994.
3. Countering the arguments, Shri Atul Dixit, learned SDR, submitted that a perusal of the show cause notice dated 12-5-99 would clearly reveal that it was mentioned therein that the Appellants were required to pay the service tax under goods transport operators category from 16-11-97 to 2-6-98 which was not paid by them at all; that it is thus evident that the show cause notice in fact mentioned the non payment of service tax which was payable by the appellants. He, further, submitted that in service tax matters the amount of Service Tax payable will be known to the Department only after the person responsible to pay the service tax files the quarterly returns as required under provisions of Section 70 of the Finance Act, 1994; that unless and until the return is filed, there is nothing available with the Department to verify the services rendered on which the duty could be assessed. He, therefore, contended that the Commissioner in passing the orders in revision has therefore, not exceeded her powers. The show cause notice which mentions about the non-payment of service tax is a part of the record.
He also drew our attention to the fact that the appellants have already deposited the entire amount of service tax on 5-4-2002.
4. We have considered the submissions of both the sides. Section 73 of the Finance Act, 1994 provides for issuing of a show cause notice to the assessee, if the value of taxable service has escaped the assessment by reason of omission or failure on the part of the assessee to make the return under Section 70 of any particular period. Further, Section 72 empowers the proper officer to make the assessment of the value of taxable service to the post of his judgment and determination the same payable by the assessee after he fails to make the return under Section 70 of the Act. A perusal of the show cause notice dated 12-5-99 clearly reveals that the appellants were only to be called upon to show cause to the Assistant Commissioner as to why the penal action against them be not taken for non-filing the quarterly returns. The appellants were not put on notice at all for non-making the service tax which has been since paid by them; that however, this fact of non-payment was duly mentioned in the show cause notice. As such the learned Advocate has rightly submitted that there was no proposal for payment of service tax, which was not paid by them. Section 84 of the Finance Act, 1994 empowers the Commissioner to call for the record of the proceedings which has been taken by the Assistant Commissioner/Deputy Commissioner and makes such inquiry and pass such orders as he thinks fit. As the record of the proceedings did not contain any proposal and any Order for making the payment of service tax, the Commissioner in exercise of the revision powers cannot demand the payment of service tax with interest. It is settled law that the revisionary authority cannot travel beyond the show cause notice. This was the view taken by the Tribunal in the case of Extrusion Process P Ltd., v. CCE, Bombay-II, 1994 (69) E.L.T. 144 (Tri). In the case of Dasaunda Singh/Waryam Singh, relied upon by the learned Advocate, Punjab and Haryana High Court held that as the assessing authority did not invoke its jurisdiction for levying the penalty, the revisionary authority has no jurisdiction to invoke the revisionary power and remanded the case to the adjudicating authority with a direction to re-decide the matter. In the present matter, as the notice was not issued under Section 73 of the Finance Act and it was issued only under Section 77 for imposing penalty on account of failure to file returns, the Commissioner cannot under the revisionary powers pass an order for making payment of service tax with interest. Accordingly, the appeal is allowed to this extent.