Independent scrutiny by appellate authorities is required before confirming tax demand; refusal to verify evidence led to remand.

An appellate authority exercising powers to confirm, modify or annul an order must independently examine relevant evidence and, where necessary, make further enquiry before deciding tax liability. Here, the Commissioner (Appeals) was required to scrutinise the appellant's reply, invoices and credit details instead of declining verification on the basis of the adjudicating record alone. Because the documents were not properly considered, the confirmation of service tax demand was held unsustainable and the matter was remitted for fresh adjudication.

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Issues: Whether the Commissioner (Appeals) was justified in confirming the service tax demand without independently verifying the documents and material relied upon by the appellant.

Analysis: The appellate authority under Section 35A(3) of the Central Excise Act, 1944, as made applicable to service tax matters by Section 85(5) of the Finance Act, 1994, has power to make further enquiry and to confirm, modify, or annul the order appealed against. That power requires independent scrutiny of relevant records and does not permit refusal to examine material merely because it was not fully appreciated by the adjudicating authority. The record showed that the appellant had produced a reply, invoices, and credit details, but these were not properly considered.

Conclusion: The Commissioner (Appeals) erred in declining to verify the appellant's documents and in confirming the demand without proper examination. The order was set aside and the matter was remitted for fresh adjudication.

Ratio Decidendi: An appellate authority exercising statutory powers of confirmation, modification, or annulment must independently examine relevant evidence and undertake necessary further enquiry before deciding tax liability.

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