2023 (1) TMI 989 - AT - Service Tax

Tribunal Remands Appeal for Proper Adjudication: Emphasis on Procedural Fairness

The Tribunal allowed the appellant's appeal by way of remand, directing the matter to be sent back to the Original Adjudicating Authority for a reasoned ... Maintainability of appeal - non-compliance with Section 35F - Short payment of service tax - works contract service - HELD THAT:- There is controversy with regard to service of the show cause notice on the appellant-assessee. Further, as the Commissioner (Appeals) have dismissed the appeal for want of compliance of Section 35F, this ground could not be decided. Accordingly, this appeal is allowed by way of remand. The matter is remanded to the file of the Original Adjudicating Authority to pass a reasoned order, in accordance with law, after hearing the appellant-assessee. Appeal allowed by way of remand. Issues:1. Alleged discrepancy in service tax payment based on data from Income Tax Department.2. Ex parte order confirming demand and imposing penalties.3. Dismissal of appeal by Commissioner (Appeals) for non-compliance with Section 35F.4. Lack of notice affecting appellant's ability to present case effectively.Analysis:Issue 1: The appellant, a registered assessee under service tax provisions, faced allegations of a discrepancy in service tax payment amounting to Rs. 11,54,223 based on data from the Income Tax Department. The show cause notice was contested by the appellant, claiming non-receipt, leading to an ex parte order confirming the demand and penalties.Issue 2: The ex parte order imposed penalties under various sections of the Act, including Rs. 10,000 under Section 77 r/w Section 69 for incorrect tax assessment and Rs. 60,000 under Section 70(1) for delayed or non-filing of returns. The penalties were challenged by the appellant in the appeal process.Issue 3: The appeal before the Commissioner (Appeals) was dismissed due to non-compliance with Section 35F of the Central Excise Act, which required a pre-deposit. The appellant argued that they were not notified about this requirement, hampering their ability to present a defense effectively.Issue 4: The appellant contended that the lack of notice regarding compliance with Section 35F prevented them from making effective pleadings before the lower court. The Tribunal, after considering the contentions of both parties, allowed the appeal by way of remand. The matter was remanded to the Original Adjudicating Authority to pass a reasoned order after ensuring proper service of the show cause notice and providing the appellant an opportunity to be heard.In conclusion, the Tribunal directed the appellant to appear before the Adjudicating Authority with a copy of the order for further proceedings. The decision highlighted the importance of proper notice and compliance with procedural requirements in tax matters to ensure a fair adjudication process.