Ex parte service tax adjudication set aside, with remand for fresh decision after non-cooperation before the authority.

Ex parte confirmation of a service tax demand under the club or association service provisions was set aside because the appellants had not replied to the show-cause notices and had not appeared before the adjudicating authority. Since the order had been passed without effective participation, the matter was remanded for fresh adjudication after the appellants were directed to file a reply and appear before the authority. The authority also held that the appellants' non-cooperation justified costs, and imposed costs on them.

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Issues: Whether the ex parte adjudication confirming service tax demand under the club or association service provisions should be set aside and the matter remanded for fresh decision, and whether costs were warranted for non-cooperation before the adjudicating authority.

Analysis: The appellants had not filed a reply to the show-cause notices and had not appeared before the adjudicating authority despite notice. The demand included amounts described as activity and maintenance charges, while the appellants sought to rely on the Gujarat High Court ruling on the constitutional validity of the relevant service tax provisions. In view of the absence of participation before the original authority and the ex parte nature of the order, the matter required reconsideration after the appellants were directed to file a reply and appear before the adjudicating authority. The non-cooperation also justified imposition of costs.

Conclusion: The impugned order was set aside and the matter was remanded to the adjudicating authority for fresh decision in accordance with law, with costs of Rs. 20,000/- imposed on the appellants.

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