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of <h1>Tribunal overturns tax demand due to lack of fair opportunity, stresses right to reply</h1> <h3>MUKESH & ASSOCIATES Versus COMMR. OF C. EX., SALEM</h3> The Tribunal set aside the Commissioner's order demanding over Rs. 1.38 crores in service tax and penalties under the Finance Act, 1994, for 'Consulting ... No reply to SCN filed - party’s request for a last opportunity to file reply to the notice ought to have been considered - Opportunity to submit reply to show-cause notice is part of opportunity of being heard - Commissioner has not done substantial natural justice to the party by not granting them this opportunity - party shall also co-operate with the adjudicating authority by filing their reply to SCN without seeking any more adjournment - appeal is allowed by way of remand Issues:1. Demand of service tax and penalties imposed under the Finance Act, 1994.2. Denial of natural justice regarding the opportunity to file a reply to the show-cause notice.3. Adjudication process and principles of natural justice.Analysis:1. The appeal pertains to a demand of service tax amounting to over Rs. 1.38 crores in the category of 'Consulting Engineer's Service' for a specific period, along with penalties imposed under the Finance Act, 1994. The Commissioner, in the impugned order, demanded this amount based on certain expenses incurred by the party related to the service. The party did not file a reply to the show-cause notice despite being given three opportunities to be heard. The Commissioner's decision on the party's request for adjournment and supply of certain documents was noted in the order. The Tribunal observed that the party's request for a last opportunity to file a reply should have been considered, as it is a crucial part of the opportunity to be heard in response to the allegations raised in the show-cause notice.2. The issue of denial of natural justice arose concerning the party's request for documents and time to file a reply to the show-cause notice. The Tribunal noted that while the department stated that the requested documents were not in their possession and were not relied upon in the notice, the party did not provide evidence to the contrary. Despite this, the Tribunal emphasized that the opportunity to submit a reply is essential for a fair adjudication process. The Tribunal concluded that the Commissioner did not do substantial justice to the party by not granting them this opportunity, highlighting the importance of procedural fairness in legal proceedings.3. After hearing arguments from both sides, the Tribunal set aside the impugned order and remanded the case to the Commissioner for fresh adjudication in accordance with the law and principles of natural justice. The Tribunal directed the Commissioner to provide necessary documents to the party if they are in departmental custody and essential to disprove any part of the department's case. Additionally, the party was instructed to cooperate by filing their reply to the show-cause notice promptly and attending hearings without seeking unnecessary adjournments. The appeal was allowed by way of remand, emphasizing the importance of a fair and transparent adjudication process in line with the principles of natural justice.
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