TaxTMI 
TaxTMI 
2025 (6) TMI 1008
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....holding that appellant has provided Mandap Keeper Services without evidence of provision of service and is liable to pay service tax on total receipts? iv. Whether Hon'ble CESTAT is correct in confirming the demand against the appellant without allowing abatement in value of service available in terms of Notification No.01/2006-ST dated 01.03.2006?" 2. For the sake of convenience, substantial question of law No. iii is reformulated as under: - "iii. Whether Hon'ble CESTAT was correct in law in holding that appellant has provided Mandap Keeper Services without evidence of providing service and is liable to pay service tax on total receipts?" 3. The aforesaid questions of law arise for consideration on the following factual backdrop: - 4. M/s. Saubhagya Tilak Hotels Pvt. Ltd. - the appellant herein, was engaged in operating a non-air-conditioned restaurant (without alcohol service) and B2B supply of bakery and confectionary items during disputed period 2008-09 to 2010-11 and during that period, service tax was not levied on non-AC and non-alcohol serving restaurants, and supply of bakery and confectionary was also sale of goods. As a consequence of search o....
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....iled by the appellant before the CESTAT which has also been dismissed on 6-2-2024. 6. Mr. Rahul Tamaskar, Advocate, appearing on behalf of Mr. Bhishm Aluwalia, learned counsel for the appellant, would submit that the author of relied upon documents receipt and expenditure sheets i.e. Accountant has not been examined in the entire investigation and furthermore, Mr. Satish Kumar Pachouri, whose statement has been heavily relied upon by the Revenue, though sought to be cross-examined by the appellant, but despite prayer having been made, he has not been allowed to be cross-examined which is violative of the procedure prescribed under Section 9D of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. Furthermore, the documents that have been returned being non-relied upon documents have also been relied upon to hold the appellant liable for service tax. Mr. Tamaskar, learned counsel appearing for the appellant, would lastly submit that relied upon documents are inconclusive to establish rendering of Mandap Keeper Services, as such, the impugned order passed by the adjudicating authority i.e. the Commissioner of Customs & Central Excise and affirmed by the appe....
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....essee which the Commissioner of Customs & Central Excise/adjudicating authority rejected holding that since Mr. Satish Kumar Pachouri, Manager (Operations), whose statement was recorded under Section 14 was the employee of the appellant/assessee and no specific reason was attributed requesting for such cross-examination, relying upon the decision rendered by the CESTAT, Bangalore in Shalini Steels Pvt. Ltd. (supra). On challenge being made by the appellant before the appellate authority CESTAT, the appellate authority has not recorded any specific finding in this regard. 11. Section 14 of the Central Excise Act, 1944 confers powers on the Central Excise Officer to summon persons to give evidence. Such statements are admissible in evidence. By relying upon these statements so recorded, the Central Excise Officer adjudicating the case may : (a) raised demand of Central excise duty; (b) confiscate any goods, plant or machinery, etc.; (c) levy penalties. In view of the aforesaid power and jurisdiction confers to the Central Excise Officer, the adjudicating proceedings are quasi-judicial in nature. [See:- T. Ashok Pai v. CIT, Bangalore (2007) 7 SCC 162; Vin....
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....l. 15. In the instant case, it is not the case of the appellant that where any of the circumstances mentioned in clause (a) of sub-section (1) of Section 9D of the Central Excise Act, 1944, exist. Therefore, clause (b) of sub-section (1) of Section 9D would come into operation. The said clause prescribes a specific procedure to be followed before the statement can be admitted in evidence and under this procedure, two steps are required to be followed by the adjudicating authority under clause (b) of sub-section (1) of Section 9D, viz., (i) the person who made the statement has to be examined first as a witness in the case before the adjudicating authority, and (ii) the adjudicating authority has, thereafter, to form the opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. 16. The object beyond enacting clause (b) of sub-section (1) of Section 9D of the Central Excise Act, 1944 is explicitly clear. The statement, recorded during inquiry/investigation, by the Gazetted Central Excise Officer, has every chance of having been recorded under coercion or compulsion. It is a matter of....
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....n by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that crossexamination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them." 20.A Division Bench of this Court also in the matter of Hi Tech Abrasives Ltd. v. Commissioner of Central Excise & Customs, Raipur 2018 (362) ELT 961 (Chhattisgarh) considered the scope of proc....
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....udicating authority but the adjudicating authority is obliged under the law to examine him and form an opinion that having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. Therefore, we would say that even mere recording of statement is not enough but it has to be fully conscious application of mind by the adjudicating authority that the statement is required to be admitted in the interest of justice. The rigor of this provision, therefore, could not be done away with by the adjudicating authority, if at all, it was inclined to take into consideration the statement recorded earlier during investigation by the Investigation officers. Indeed, without examination of the person as required under Section 9D and opinion formed as mandated under the law, the statement recorded by the Investigation Officer would not constitute the relevant and admissible evidence/material at all and has to be ignored. We have no hesitation to hold that the adjudicating officer as well as Customs, Excise and Service Tax Appellate Tribunal committed illegality in placing reliance upon the statement of Director Narayan Prasad Tekriwal which was ....
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....n is in violation of the principles of natural justice, as because of non-affording of the opportunity of cross-examination, the appellant/assessee was adversely affected as held by their Lordships of the Supreme Court in Andaman Timber Industries (supra). 22. In the matter of Lakshman Exports Ltd. v. Collector of Central Excise (2005) 10 SCC 634 also, the assessee therein was not allowed to cross-examine the representative and their Lordships of the Supreme Court finding necessity to give an opportunity to cross-examine the witness, remanded the matter back to the competent authority by holding as under: - "2. We find that, in the reply to the show-cause notice, the assessee had specifically asked to be allowed to crossexamine the representatives of these two concerns to establish that the goods in question had been accounted for in their books of account and the appropriate amount of Central excise duty had been paid. The logic of such request is clear from what is stated therein. 3. It is now not contested that the matter should go back to the assessing authority, who shall near the matter de novo after ensuring that lacunae pointed out in the order of the V....