2013 (10) TMI 385 - AT - Service Tax

Adjudication order overturned for violating natural justice in service tax case. Pre-deposit waived, recovery stayed.

The Tribunal found that the adjudication order in a service tax case violated natural justice by relying on evidence not provided to the applicants. As a ... Manpower Recruitment or Supply Agency Service u/s 65(68) of Finance Act – Waiver of Pre-deposit - The applicants provided ‘Manpower Recruitment or Supply Agency Service' as provided u/s 65(68) of the Finance Act – Held that:- The information from the Assistant Commissioner of Labour, Aurangabad is obtained after the date of personal hearing and copies of the same are not supplied to the applicant and the same has been relied upon in the adjudication order - The copies of the relevant papers which were received from the Assistant Commissioner, Labour, Aurangabad, were now supplied at the direction of the Tribunal during the pendency of the stay application - the adjudication order is passed in violation to the principles of natural justice - the pre-deposit of the dues are waived for hearing the appeal and recovery of the same is stayed – Stay Granted. The adjudicating authority passed the order in violation to the principles of natural justice and the applicants received the relevant papers during the hearing of the appeals before the Tribunal - the orders are set aside and matter is remanded back to the adjudicating authority to decide afresh and after affording an opportunity of hearing to the appellants. The appeals are disposed of by way of remand. Issues involved:Common issue of waiver of dues based on violation of principles of natural justice in service tax cases.Detailed Analysis:1. Violation of Principles of Natural Justice:The applicants filed appeals along with applications for waiver of pre-deposit of service tax amounts against a common order-in-appeal. The main contention was that the demand of service tax was confirmed based on the applicants providing 'Manpower Recruitment or Supply Agency Service' under the Finance Act. The applicants argued that the adjudicating authority relied on an enquiry report submitted by the Assistant Commissioner of Labour, Aurangabad, after the personal hearing, without providing the material collected post-hearing to the applicants. The Tribunal directed the revenue to produce the enquiry report, which was done. The applicants claimed that using evidence collected post-hearing against them without supplying copies violated the principles of natural justice.2. Non-Compliance with Stay Order:The Commissioner (Appeals) had directed the applicants to deposit the service tax amount along with interest for hearing the appeals. However, the applicants failed to comply with the condition of the stay order on merits, leading to the dismissal of the appeal. The contention was that the adjudication order was passed in violation of natural justice, and the Commissioner (Appeals) did not hear the appeal on merits but dismissed it for non-compliance with the provisions of the Finance Act.3. Evidence Consideration and Stay of Recovery:The Tribunal found merit in the applicant's contention that the adjudication order was passed in violation of natural justice as the information from the Assistant Commissioner of Labour, Aurangabad, obtained post-hearing, was relied upon without being supplied to the applicants. The copies of relevant papers were supplied during the pendency of the stay application. Consequently, the pre-deposit of dues was waived for hearing the appeal, and the recovery of the same was stayed. The Tribunal set aside the impugned orders and remanded the matter back to the adjudicating authority for a fresh decision after affording an opportunity of hearing to the appellants.In conclusion, the judgment focused on the violation of principles of natural justice in service tax cases, leading to the waiver of pre-deposit of dues and a remand of the matter for a fresh decision.