TaxTMI 
TaxTMI 
2022 (12) TMI 565
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....t adjudication order has been passed after a lapse of about more than 18 months from the date of the final hearing, thereby violating Clause 14.10 of Master Circular No. 1053/02/2017-CX dated 10th March, 2017, which provides, inter alia, that after conclusion of personal hearing, decision is required to be communicated as expeditiously as possible, but not later than one month in any case, barring in exceptional circumstances to be recorded in the file. 2. The petitioner company is engaged in the business of executing various electromechanical jobs for bulk material handling equipment, and also has its manufacturing unit in Jamshedpur dedicated towards electromechanical jobs, Industrial Structure, Fabrication and Life Cycle Services and allied services. Petitioner was duly registered under the provisions of the Finance Act, 1994, and, for the periods in dispute i.e. 2012-13 to 2015-16 and the periods between 2016-17 to 2017-18 (1st Quarter), the petitioner duly filed its Service Tax Returns being ST-3 Returns. However, on 03.01.2017, Demand-cum-Show Cause Notice pertaining to the periods 2012-13 to 2015-16 was issued to the Petitioner primarily stating, inter alia, that informat....
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....virtual mode', and, on 12.11.2020, hearing through 'virtual mode' was held by the successor in office of Respondent No.2. On the date of personal hearing on 12.11.2020, submissions of the Petitioner were specifically recorded that the amount reflected in 26AS also pertains to the amount received by it for supply of goods under sales contract as well as under works contract service and there is no service tax liability against the amount received pertaining to pure sales contract. However, it was recorded that Petitioner has not produced any corroborative evidence along with show cause reply and, accordingly, adjudicating authority asked the representative of the Petitioner to provide explanation for difference between the amount appearing in 26AS and ST-3 Return for each year with documentary evidence. Accordingly, vide letter dated 03.12.2020 issued by the office of the Commissionerate, Jamshedpur, Petitioner was directed to produce documentary evidences corroborating the difference of the amount appearing in 26AS and ST-3 Return within 8 weeks from the date of personal hearing. 5. The further case of the petitioner company is that pursuant to the personal hearing held on 12.11....
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....hat due to passage of time of almost more than 18 months in passing the Order-in-Original after the date of personal hearing, serious prejudice has been caused to the Petitioner, as the adjudicating authority has forgotten to consider, discuss and deal with various related contentions which were raised in the show cause reply, and, the most essential document dated 12.01.2021 containing therein written explanation along with documentary evidences explaining the reasons for difference between 26AS Statement and ST-3 Return itself, has not been considered. While referring to the adjudication order, it was brought to our notice that the adjudicating authority has itself admitted that points of taxation in income tax and service tax are different and, hence, liability cannot be determined from Form 26AS and, at best, Form 26AS is only a useful starting point for examining the mismatch and the reasons have to be looked into and reconciliation is to be resorted. It was submitted that despite the fact that Petitioner submitted the reconciliation vide its letter dated 12.01.2021 annexing detailed documentary evidences, it has been recorded in the Order-in-Original that documentary evide....
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....s asked for time and ever after lapse of considerable time, when the Petitioner failed to submit the same, finally, adjudication order dated 25th July, 2022 was passed taking into account information and grounds already on record. It was further submitted that there is difference between no opportunity of hearing being granted, vis-à-vis sufficiency of opportunity of hearing to be granted to an assessee, and, in the later case, extraordinary writ jurisdiction of the Hon'ble High Court should not be exercised and Petitioner should be relegated to avail alternative remedy existing under the Statutes. In order to buttress its aforesaid contention, reliance was placed on the following decisions, namely:- (1) Modern School vs. Shashi Pal Sharma & ors, reported in (2007) 8 SCC, 540; (2) State Bank of Patiala & Ors. vs. S.K. Sharma, reported in (1996) 3 SCC 364 (Para 28); and (3) Assistant Commissioner of State Tax & Ors. vs. Commercial Steel Limited, reported in 2021 SCC Online SC 884. 8. Having heard learned counsels for the parties and after going through the documents annexed with the respective affidavits and the averments made therein;it is relev....
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....ded that at the time of passing of the Order-in-Original, submissions of the Petitioner have been dealt with. For ready reference, relevant extract of Paragraph-13 of the Counter Affidavit is quoted hereunder:- "Although the letter dated 12.01.2021 does not find mention in the Order-in-Original, the submissions of the petitioners have been dealt with in the Order dated 25.07.2022 at paras 4.3, 4.4, 4.5, 4.6 and 4.7 of the Order dated 25.07.2022 (pages 21 t\o 24 of the said Order). Further, it is to state that payment of service tax is governed by Point of Taxation Rules, 2011 and timing difference has to be explained in that light. Exempted services claimed by the petitioner have admittedly not been mentioned in statutory returns. Even at the time of investigation, no such claim was made." 10. Thereafter, the petitioner filed its Rejoinder Affidavit to the said Counter Affidavit and highlighted the portions of the Order-in-Original dated 25th July, 2022, particularly paras 4.3 to 4.7, and, it was emphasized that in the said paragraphs of the adjudication order, the sole basis of determining suppression of turnover was that Petitioner failed to produce any documentary....
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....ce between the amount appearing in form 26AS and ST-3 returns, for each of the years covered in the show cause notice/SOD, with documentary evidence. The representatives promised to submit the same but failed to do so. ..............XXX 4.4 For the financial year 2013-14 the receipt under Sections 194C and 194J (as per Form 26AS) is Rs.228,14,30,286/- which has been considered as gross taxable value in view of the fact that the noticee did not submit any documents to substantiate that the amount charged by them from their service recipients included service tax. ............XXX 4.5 Similarly, for the financial year 2014-15, the receipt under Sections 194C and 194J (as per Form 26AS) is Rs140,70,99,187/- which has been considered as gross taxable value in view of the fact that the noticee did not submit any documents to substantiate that the amount charged by them from their service recipients included service tax. In the absence of copies of invoices and/or other details related to the invoices, it cannot be said that the gross amount is inclusive of service tax payable. Hence, the value as per FORM 26AS has been considered as gross taxable value. ...............X....
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....o produce evidences, and, the Petitioner, vide its letter dated 12.01.2021, asked for further time for producing evidence, but without giving any further opportunity, straight away, the Order-in-Original was passed on 25th July, 2022. Thus, by only granting one opportunity to the Petitioner with respect to the periods 2016-17 and 2017-18, Order-in-Original has been passed, which is also contrary to the guidelines issued by CBEC in its Master Circular dated 10th March, 2017. CBEC has issued Master Circular dated 10th March, 2017 laying down therein detailed guidelines relating to issuance of Show Cause Notice and passing of adjudication order. Clause 14.3 and 14.10 of the said Master Circular are quoted hereunder:- "14.3 Personal hearing : After having given a fair opportunity to the noticee for replying to the show cause notice, the adjudicating authority may proceed to fix a date and time for personal hearing in the case and request the assessee to appear before him for a personal hearing by himself or through an authorized representative. At least three opportunities of personal hearing should be given with sufficient interval of time so that the noticee may avail opport....
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....even laid down some guidelines regarding the pronouncement of Judgments by superior courts i.e. High Courts. 15. A series of circulars have been issued by CBEC laying down guidelines that there should not be any unreasonable delay in passing adjudication orders which will be causing difficulties and obstacle in realizing public revenue expeditiously. In fact, in the interest of revenue itself, delay in passing of the adjudication orders would act as an impediment in timely realization of the disputed amount. That apart, pronouncement of judgment, being a part of justice dispensation system, has to be without delay, as justice should not only be done but should also appear to have been done. The present case is a classic example wherein due to delay in passing of the adjudication order it appears that the most vital documents submitted by the assessee, being the reconciliation documents, were not considered and dealt with by the adjudicating authority despite the fact that they admit now in the supplementary counter affidavit that the same were available on record. An obvious inference of omission to make reference to the documents can be due to the delayed delivery of the Jud....