2010 (8) TMI 273 - AT - Service Tax

Waiver of pre-deposit delay in payment of service - appellant failed to produce relevant documents to show the break-up of the consideration received - neither reply to show cause notice was filed nor also there was appearance made by the appellant to explain its case - matter needs remand to. Adjudicating Authority to grant an opportunity to the Appellant to appear and explain its case

Summary

Issues:
1. Ignoring plea under Section 80 of the Finance Act, 1994 for consideration due to hardship.
2. Invocation of penal provisions under Section 76 of the Finance Act, 1994.
3. Failure to provide relevant documents and defense before the Authorities.
4. Imposition of penalty without proper hearing.
5. Remand of the matter to the Adjudicating Authority.

Analysis:

1. The Appellant contended that their plea under Section 80 of the Finance Act, 1994, based on hardship, was disregarded by the Adjudicating Authority. They argued that although there was a delay in paying service tax, there was no deliberate intent for the delay, especially considering the early stage of the adjudication process when the service was provided in 2003. The Appellant requested a waiver of the pre-deposit due to these circumstances.

2. The Departmental Representative (DR) argued that the Appellant failed to provide a valid cause for concession in penalty. The Authorities were compelled to invoke penal provisions as the Appellant did not furnish necessary documents to demonstrate the breakdown of the consideration received. Despite multiple notices, the Appellant did not respond to the show cause notice or appear to present their case. The DR highlighted discrepancies in the Appellant's claims regarding gross receipts and service tax payments, indicating a lack of evidence to support their defense.

3. The Tribunal observed that penalty proceedings are quasi-judicial in nature and should not be automatically imposed solely based on the existence of a legal provision. Acknowledging the lapses on the Appellant's part as pointed out by the DR, the Tribunal noted findings against the Appellant in the adjudication order. The Tribunal emphasized the importance of providing the Appellant with an opportunity to present their case, especially if they believed they were eligible for relief under Section 80 of the Finance Act, 1994. The Tribunal directed the matter to be remanded to the Adjudicating Authority for a fair hearing.

4. Considering the potential hardship the penalty could impose on the Appellant, the Tribunal instructed the Appellant to appear before the Adjudicating Authority within a month, file an application for a hearing date, and make a deposit of Rs. 50,000. The Appellant was required to produce the challan as proof of deposit along with the application. Despite the decision to remand the matter, the Tribunal emphasized the importance of the Appellant cooperating with the process to avoid any prejudice to the Revenue.

In conclusion, the Tribunal recognized the need for a proper hearing and opportunity for the Appellant to present their case, emphasizing the importance of procedural fairness and adherence to legal provisions in penalty proceedings.