THE HIGH COURT OF MEGHALAYA

Service Tax Appeal No. 3 of 2013

M/s Engineering Projects (India) Limited, a Govt. of India undertaking, incorporated under Companies Act, 1965, having its Registered Office at Core-3, Scope Complex, 7- Institutional Area, Lodi Road, New Delhi-110003 and its project office at Harishova Laban, Shillong-793004, in the State of Meghalaya represented through its Manager (Finance) Sri Arabinda Chakrabari, aged 59 years, s/o Late Dr. Sakesh Chandra Chakraborty, resident of 65, Rajaram Mohan Roy Road, Kolkata-700082.

……. Appellant

-Versus-

The Commissioner of Central Excise, MG Road, Shillong, Meghalaya.

……. Respondent

Shri Kartik Kurmy, Shri Anand Jaluka, Shri DK Acharjee,

Advocates, present for the appellant.

Mrs T Yangi, Advocate, present for respondent.

Date of hearing 23rd May, 2014

Date of Judgment and Order 23rd May, 2014

HON'BLE THE CHIEF JUSTICE and HON'BLE MR JUSTICE SR SEN

JUDGMENT AND ORDER

ORAL: HON'BLE PRAFULLA C. PANT, CHIEF JUSTICE

This Service Tax Appeal filed under Section 35 (G) of Central Excise Act, 1944 read with Section 83 of Chapter V of the Finance Act, 1994 is directed against the order dated 27.11.2012/29.11.2012 passed by the Customs, Excise and Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata, in SP No. 16 of 2011 and Service Tax Appeal No. 13 of 2011, whereby, the appeal has been dismissed by the Tribunal for the want of clearance from Committee on Disputes (CoD), and the application (SP No. 16 of 2011) stood disposed of with it.

2. Heard learned counsel for the parties.

3. Brief facts of the case are that the appellant M/s Engineering Projects (India) Ltd., Harishova, Laban, Shillong is an organization engaged in the field of construction, engineering and consultancy services. There is no dispute that the appellant is a Government of India undertaking incorporated under the Companies Act, 1956. The appellant was served with a show cause notice dated 18.05.2007, by the Addl. Commissioner of Central Excise, Shillong regarding liability of Service Tax amounting to Rs. 1,77,33,736/- and Rs. 35,467/- as Education Cess. The demand appears to have been made under Section 73 of the Finance Act, 1994. The adjudication order dated 10.12.2008 arisen out of show cause notice was

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challenged by the appellant before the Commissioner of Central Excise (Appeals), Guwahati by filing an application under Section 85 of the Finance Act, 1994. Said authority vide order dated 28.07.2009 directed the appellant to deposit the 50% of Service Tax as a condition to stay adjudication order dated 10.12.2008. The appellant appears to have filed Service Tax No. 13 of 2011 along with SP No. 16 of 2011 against the order dated 26.10.2010 before the Customs, Excise and Service Tax Appellate Tribunal, Kolkata. Which was dismissed by the impugned order, in limini, on the ground of want of clearance from the Committee on Disputes (CoD).

4. The requirement of clearance from Committee on Disputes (CoD) for filing the appeal was based on the law laid down by the Apex Court in Oil and Natural Gas Commission vs. Collector, 1992 (61) ELT 3 (SC), Oil and Natural Gas Commission vs. Collector, 1994 (70) ELT 45 (SC) and ONGC Ltd. vs. City and Industrial Development Corporation, 2009 (233) ELT 30 (SC).

5. However, subsequent to said cases, Five Judges Bench of the Apex Court in Electronics Corporation of

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India Ltd. vs Union of India, 2011 (265) ELT 11 (SC), made the following observations in para 9 :

" 9. The idea behind setting up of this Committee, initially, called a "High-Powered Committee" (HPC), later on called as "Committee of Secretaries" (CoS) and finally termed as "Committee on Disputes" (CoD) was to ensure that resources of the State are not frittered away in inter se litigations between entitles of the State, which could be best resolved, by an empowered CoD. The machinery contemplated was only to ensure that no litigation comes to Court without the parties having had an opportunity of conciliation before an in-house committee. (see : para 3 of the order dated 7.1.1994 (supra) Whilst the principle and the object behind the aforestated Orders is unexceptionable and laudatory, experience has shown that despite best efforts of the CoD, the mechanism has not achieved the results for which it was constituted and has in fact led to delays in litigation. We have already given two examples hereinabove. They indicate that on same set of facts, clearance is given in one case and refused in the other. This has led a PSU to institute a SLP in this Court on the ground of discrimination. We need not multiply such illustrations. The mechanism was set up

with a laudatory object. However, the mechanism has led to delay in filing of civil appeals causing loss of revenue. For example, in many cases of exemptions, the Industry Department gives exemption, while the same is denied by the Revenue Department. Similarly, with the enactment of regulatory laws in several cases there could be overlapping of jurisdictions between, let us say, SEBI and insurance regulators. Civil Appeals lie to this Court. Stakes in such cases are huge. One cannot possibly expect timely clearance by CoD. In such cases, grant of clearance to one and not to the other may result in general of more and more litigation. The mechanism has outlived its utility. In the changed scenario indicated above, we are of the view that time has come under the above circumstances to recall the directions of this Court in its various orders reported as (i) 1995 Supp (4) SCC 541 dated 11.10.1991, (ii) (2004) 6 SCC 437 dated 7.1.1994 and (iii) (2007) 7 SCC 39 dated 20.7.2007."

From the above observations and directions of the Apex Court, it is clear that the directions issued by the Apex Court earlier in the cases of ONGC vs. Collector, 1992 (61) ELT 3(SC) and ONGC vs. Collector, 1994(70) ELT 45 (SC) and stood recalled.

6. Learned counsel for the appellant drew attention of this Court to the case of Steel Authority of India Ltd. vs Commissioner of Central Excise, Bolpur, 2014 (302) ELT 348 (Cal), and Steel Authority of India vs. CESTAT, Kolkata, 2013 (293) ELT 510 (Cal) and argued that the Tribunal has erred in law in dismissing the appeal of the present appellant merely for the want of clearance from the CoD, particularly, when the directions in the ONGC's cases (supra) already stood repealed.

7. In reply to this, Mrs T Yangi, learned counsel for the respondent submitted that since the appeal was filed (in CESTAT, Kolkata), before the judgment was passed in Electronics Corporation of India's case (supra), as such it cannot be said that the appellant is entitled to the benefit of the order recalling directions given in the ONGC's cases (supra).

8. Considering the rival submissions of the learned counsel for the parties, we are of the view that the spirit of the judgment given by the Apex Court in Electronics Corporation of India vs Union of India, 2011 (265) ELT 11 (SC) should have been kept in mind by the CESTAT, particularly, when such a judgment has already been passed on 17.02.2011, i.e. much before the impugned order was passed by the CESTAT, i.e. 27.11.2012/29.11.2012. That being so, we are of the view that CESTAT should have considered the appeal and the application on its merits instead of dismissing the same for the want of clearance from CoD.

9. Therefore, for the reasons as discussed above, this appeal deserves to be allowed. Accordingly, the appeal is allowed, and impugned order No. S-1538/A-848/KOL/2012 dated 27.11.2012/29.11.2012 passed in SP No. 16 of 2011 and Service Tax Appeal No. 13 of 2011 is hereby set aside, and the Customs, Excise and Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata is directed to decide the appeal and application on its merits.

JUDGE (Prafulla C Pant) (Hon'ble Mr Justice SR Sen) CHIEF JUSTICE

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