2013 (11) TMI 1406 - AT - Service Tax

Court Upholds Due Process in Central Excise Case, Emphasizes Pre-Deposit Compliance

Nikhil Enterprises Versus CCE., & S. Tax, Jaipur I

The court found that there was substantial compliance with the due process requirements in serving the show cause notice under Section 37C of the Central ... Interest u/s 75 - Penalties under Sections 76, 77 and 78 - Manpower recruitment or supply agency - Section 65(105)(zr) read with Section 65(68) - manner of service of notice for summons - Violation of Section 37C - Held that:- unproductive enterprise of Revenue in serving summons on the petitioner at its registered address, Revenue legitimately invoked the process of serving the show cause notice under Section 37C by affixing the same at the registered business premises of the petitioner. Additionally, a copy of the notice was also affixed on the residence of the proprietor of the petitioner firm - Prima facie, there was wholesome and substantial compliance with provisions of Section 37C - Decided against assessee. Issues Involved:Violation of due process requirement in serving show cause notice under Section 37C of the Central Excise Act, 1944.Detailed Analysis:1. Violation of Due Process Requirement:The judgment pertains to an adjudication order confirming service tax liability for a petitioner providing 'manpower recruitment or supply agency' service. The petitioner did not participate in the assessment proceeding, claiming the show cause notice was not served in accordance with Section 37C of the Central Excise Act, 1944. The Revenue's efforts to contact the petitioner for information were unfruitful as the premises were occupied by another firm, and the petitioner had shifted without informing the authorities. Summons were affixed at the registered business premises and the proprietor's residence after failed attempts at direct service. The contention was that the notice was not served as per the mandatory provisions of the Act.2. Compliance with Section 37C:The judgment discusses the provisions of Section 37C of the Act, which specify methods of serving decisions, orders, or notices. It mentions that if the notice cannot be served by registered post, it can be affixed at the person's place of business or residence. In this case, due to the petitioner's unavailability at the registered address, the Revenue resorted to affixing the show cause notice at the business premises and the proprietor's residence. The judgment concludes that there was substantial compliance with Section 37C, rejecting the argument of due process violation.3. Decision and Pre-Deposit Requirement:The judges found no basis for granting a waiver of pre-deposit, directing the petitioner to pre-deposit the adjudicated liability within a specified timeline. Failure to comply would result in the dismissal of the appeal. The decision was based on the lack of merit in the due process violation claim and the need for the petitioner to fulfill the pre-deposit requirement.In summary, the judgment addresses the issue of serving a show cause notice under Section 37C, emphasizing the importance of compliance with statutory provisions and concluding that there was substantial adherence to the requirements. The decision highlights the necessity of pre-deposit in such cases and dismisses the appeal due to non-compliance.