2016 (7) TMI 657 - AT - Service Tax

Tax Tribunal Emphasizes Due Process in Service Tax Appeal

The Tribunal allowed the appeal through remand, emphasizing the importance of proper service and due process in tax matters. The case involved a dispute ... Business Auxiliary Services (BAS) - Activity of data processing of electricity consumers for Andhra Pradesh Central Power Distribution Company (APCPDCL) - Extended period of limitation - Held that:- The appellant was engaged in processing electricity consumer's data for APCPDCL. The job was to maintain computerized data base of APCPDCL, on computers and furnish the required output data on magnetic tapes/file transfers/hard copies. The appellant defended the show cause notice contending that the services would fall under Information Technology Service, while department is of the view that such services fall under BAS. As it is seen that the copy of the Order-in-Original was not served upon the appellant, as a sequitur, we are of the considered view that the matter is deem fit to be remanded to the original authority for denovo adjudication. The impugned order is set aside and case is remanded to the original authority for denovo adjudication after giving reasonable opportunity to the appellant for personal hearing. - Decided in favor of assessee. Issues:1. Service tax liability on data processing services provided by the appellant.2. Non-receipt of Order-in-Original by the appellant.3. Appeal dismissal by Commissioner (Appeals) due to delay in filing.Analysis:1. The appellant, engaged in data processing of electricity consumers, contested a show cause notice alleging Business Auxiliary Services (BAS) tax liability. The original authority confirmed a demand for service tax, education cess, interest, and penalties. The appellant argued that their activities did not fall under BAS and that the extended period should not apply due to full disclosure and a genuine belief of non-taxable services.2. The appellant claimed non-receipt of the Order-in-Original. While the revenue provided documents indicating dispatch, the appellant denied receiving it. The burden shifted to the revenue to prove delivery, which they failed to do. Consequently, the Tribunal accepted the appellant's contention of non-service of the order.3. The appellant processed data for a public sector undertaking, maintaining a database and providing output data. The appellant argued for classification under Information Technology Service, contrary to the department's view of BAS. Due to the non-service of the Order-in-Original, the Tribunal remanded the case for fresh adjudication, setting aside the impugned order and granting the appellant a reasonable opportunity for a personal hearing. The appeal was allowed through remand, emphasizing the need for proper service and due process in tax matters.