Service tax demand remanded after non-speaking order ignored evidence and circular-based defence on liability

Service tax demand was remanded because the Commissioner failed to consider material evidence showing the appellant serviced cable operators, not ultimate subscribers, and ignored the Board circular on liability. The order was found to be non-speaking and unsupported by effective discussion of the defence, amounting to a breach of natural justice. Fresh adjudication was directed after proper hearing and consideration of the record.

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Issues: Whether the demand for service tax on the appellant's activities was liable to be interfered with on the ground that the Commissioner ignored material evidence and passed a non-speaking order in breach of natural justice, warranting remand.

Analysis: The appellant produced records to show that it was rendering services to cable operators, who in turn serviced the subscribers, and relied on the Board's circular clarifying that liability attached to the cable operator providing services to the ultimate subscriber. The record showed that this evidence was not properly considered, and the finding that no evidence had been produced was incorrect. The order therefore lacked a proper discussion of the material on record and did not reflect effective consideration of the appellant's defence.

Conclusion: The demand was not finally adjudicated on merits; the matter was remanded to the Commissioner for effective hearing and fresh findings after considering the evidence.

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