2014 (2) TMI 1255 - HC - Service Tax

Validity of Tribunal s order - Waiver of pre-deposit - Non-appearance of counsel of appellant - Order passed ex-parte as there was no application for adjournment and there many adjournments before to make pre-deposit a sum being entire amount of service tax demanded - Held that - the case was adjourned for the purpose of furnishing certain materials. However the nature of such materials is not placed before this Court. Be that as it may the reason assigned for non-appearance prima facie appears to be genuine in the absence of any rebuttal for the same. Therefore in order to given an opportunity to the assessee and in the interest of justice we deem it appropriate that the Tribunal should hear the assessee on merits on the miscellaneous application. Therefore the impugned order is set aside and the matter is remanded back to the Tribunal. - Appeal allowed by way of remand

Summary

Issues:
Appeal against order passed by Tribunal demanding service tax, interest, and penalty - Application for stay and waiver of pre-deposit - Non-appearance of assessee before Tribunal - Substantial questions of law raised - Valid defense not considered by Tribunal - Opportunity to present materials and contentions before Tribunal.

Analysis:
The appeal was directed against an order by the Tribunal demanding service tax, interest, and penalty from the assessee for a specific period under the Finance Act. The Commissioner had demanded a significant amount of service tax and directed payment of interest and a reduced penalty. The assessee filed an appeal and an application for stay and waiver of pre-deposit. However, during the hearing before the Tribunal, the assessee did not appear, leading to directions for pre-deposit of the entire service tax amount demanded.

Challenging this order, the assessee raised substantial questions of law, including the Tribunal's conclusion about the appellant's interest in the stay petition, consideration of the limitation issue, the main contractor's payment of service tax, and the principle of revenue neutrality. The assessee contended that valid defenses were not considered, and requested an opportunity to present all materials and contentions before the Tribunal.

Upon hearing both parties, the Court noted the genuine reason for the non-appearance of the assessee on the specified date. As it was not the first hearing and the case had been adjourned earlier for furnishing materials, the Court set aside the impugned order and remitted the matter back to the Tribunal for fresh consideration of the miscellaneous application on merits. The Court emphasized the importance of providing the assessee with an opportunity to present their case and ensured justice was served by allowing the civil miscellaneous appeal and closing the connected miscellaneous petition without costs.