TaxTMI 
TaxTMI 
2024 (10) TMI 505
X X X X Extracts X X X X
X X X X Extracts X X X X
....egister showing details of booking, copies of receipts, ITR of Financial Year 2011-12, 2012-13 & 2013-14. Further, statement of the proprietor, Shri Chandra Shekhar Agrawal was recorded under Section 14 of the Central Excise Act, 1944 on 23.04.2016 wherein he submitted a booking register and a green coloured diary and, inter-alia stated that the register is being maintained for booking and a diary is being maintained by his employees to show the inclusive booking amount negotiated by the tent houses. All the entries in respect of marriage hall booking, date and name mentioned in diary match with the entries shows in the register which was prepared for the period 2011-12 to 2014-15. Also, entries in the register and diary match with the dates of temporary electrical connection obtained from the electricity department. Consequent to the investigations, the Department alleged that for the period 2011-12 to 2015-16 (upto June), the total service tax liability of the appellant was Rs. 3,59,796/- along with interest & penalty. Accordingly, a show cause notice dated 13.10.2016 was issued. Subsequently the proceedings were finalized by the adjudicating authority vide Order-In- Original dat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....they were not subjected to examination-in-chief before the adjudicating authority and also not produced for cross-examination as stipulated under Section 9D(1)(b) of Central Excise Act, 1944. Thus, the general principles of evidence must be followed since Commissioner (Appeals) has placed extensive reliance on the statements recorded during investigation without invoking speaking section (1) of Section 9D of Central Excise Act. 3.1 Learned Counsel further submitted that the Revenue has deliberately not placed reliance on the exculpatory statement of Shri Chandra Shekhar Agarwal, Proprietor of the Appellant. He contended that Shri Chandra Shekhar Agarwal in his statement dated 28.10.2015 at Question No.10 has mentioned the names of the person through whom amounts were received. The Revenue did not take any steps to examine the said persons. Learned counsel further stated that it is not open to drop the evidence in favour of the appellant and to pick the partial evidence which may be against the appellant. 3.2 Learned Counsel also submitted that the demand of service tax under wrong classification of service is not sustainable in law as the demand in the present case has been r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of penalty is liable to be set aside. He prayed that the impugned order be set-aside 4. Learned Authorized Representative for the Department submitted that the appellant is providing the service of 'Mandap Keeper' as defined in section 65 of chapter V of Finance Act, 1994. A statement was recorded by the Department, wherein they have accepted that the register is being maintained for booking and a diary is being maintained by his employees to show the inclusive booking amount negotiated by the tent houses. The quantification of service tax payable was based on the entries made in these diaries only. The Adjudicating authority dropped the demand proposed in the SCN by relying upon the IT returns filed by the appellant to conclude that inflows were below the taxable threshold. The appellant in the grounds of appeal have submitted that the demand has been confirmed on the basis of diary which was recovered from their premises which show booking amounts. Under the law, there is a presumption about the truth of any documents recovered from the premises of a person, section 36A of the Central Excise Act, 1944 which is made applicable to service tax matter. 4.1 Learned A....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... J&K Cigarettes Ltd. v. Commissioner of Central Excise dated 28.08.2009 in WP 1854 of 1992 and others clarified that if the person who made the statement is available, the person should be presented for cross-examination when requested. The relevant paras are reproduced for ease of reference: "28. The moot question that arises at this stage is as to whether the provision in question is arbitrary. Such a provision can still be held to be offending Article 14 of the Constitution and can be termed as arbitrary if it is established that the provision gives uncanalised and uncontrolled power to the quasi-judicial authorities. But, we are of the opinion that it is not so. The safeguards are inherent in the provision itself. In the first instance, only those statements of such persons, which are made and signed before the Central Excise Officer of a gazetted rank, are treated as admissible. Thus, protection is taken to treat the statements relevant only if they are made before an officer enjoying a higher rank/status. Secondly, (and that has already been taken note of) such statements are made relevant only under certain specified circumstances, and these are the ones wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f such a provision was not warranted. 30. Therefore, it cannot be said that the provision gives uncanalised or uncontrolled power upon the quasi-judicial authority. Granting of opportunity and passing reasoned order are the conditions inbuilt in exercise of power by any quasi-judicial authority and, therefore, it is not necessary that these conditions should be specifically mentioned in the provision. The very fact that before power under Section 9- D(2) of the Act could be exercised, the authority has to satisfy itself about the existence of any of the conditions stipulated therein, which provides clear and sufficient guidance to such quasi-judicial authority to exercise its power under the section. We may also state that such arguments have been repelled by the Supreme Court on number of occasions. {See - Harishankar Bagla v. State of Madhya Pradesh, AIR 1954 SC 465; and Bhatnagars & Co. Ltd. v. Union of India, AIR 1957 SC 478}. 31. Interestingly, even in the present case, the attempt of learned senior counsel appearing for the petitioners was to show that the respondent No.1 ought to have given prior intimation and granted an opportunity to the assessee to make....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e touchstone of fairness and justice. That which is not fair . and just is unreasonable. And what is unreasonable is arbitrary. An arbitrary action is ultra vires. It does not become bona fide and in good faith merely because no personal gain or benefit to the person exercising discretion should be established. An action is mala fide if it is contrary to the purpose for which it was authorised to be exercised. Dishonesty in discharge of duty vitiates the action without anything more. An action is bad even without proof of motive of dishonesty, if the authority is found to have acted contrary to reason." 32. Thus, we summarize our conclusions as under :- (i) We are of the opinion that the provisions of Section 9-D (2) of the Act are not unconstitutional or ultra vires; (ii) while invoking Section 9-D of the Act, the concerned authority is to form an opinion on the basis of material on record that a particular ground, as stipulated in the said Section, exists and is established; (iii) such an opinion has to be supported with reasons; (iv) before arriving at this opinion, the authority would give opportunity to the affected party to make su....