2011 (8) TMI 223 - AT - Service Tax

Demand of service tax - Renting of Immovable Property Services- The Adjudicating Authority has confirmed demand of Service Tax on amount charged from IOC dealers as rent out of SSLF against properties leased to the dealers - the appellate authority has allowed appeal on the sole ground that the assessee was not heard in person as regards the service tax payable on renting of immovable property - If that be so, the appellate authority should have remanded the matter to the lower authorities for observing the principle of natural justice instead of allowing the appeal in its totality - Accordingly set aside the impugned order and remand the matter to the original adjudicating authority for de novo consideration.

Summary

Issues Involved:
Violation of principles of natural justice in confirming demand of Service Tax on renting of immovable property instead of Business Auxiliary Services.

Analysis:

Issue 1: Violation of Principles of Natural Justice
The Appellate Tribunal, in response to the appeal filed by the Revenue against the order passed by the Commissioner (Appeals), noted a violation of principles of natural justice. The Commissioner had confirmed the demand of Service Tax on the amount charged from dealers as rent for properties leased to them, which was initially issued for Business Auxiliary Services. The Tribunal observed that there was a gross violation of natural justice as the show cause notice did not cover the specific issue of Service Tax on renting of immovable property. The Tribunal cited the case of Duncas Industries Limited v. Union of India, emphasizing that no entity should be condemned unheard, highlighting the importance of fair proceedings. Consequently, the Tribunal set aside the Adjudication order as legally unsustainable and allowed the appeal.

Issue 2: Remand of the Matter
The Appellate Tribunal further addressed the issue of whether the matter should be remanded to the original adjudicating authority for de novo consideration. Despite acknowledging the violation of natural justice, the Tribunal opined that the appellate authority should have remanded the matter for a fair hearing instead of allowing the appeal outright. Therefore, the Tribunal set aside the impugned order and remanded the case to the original adjudicating authority for fresh consideration. It was emphasized that the assessee must be given an opportunity to present their case, ensuring a fair and just process. The Tribunal clarified that its decision to remand the matter did not imply any judgment on the merits of the case, indicating a procedural step to uphold the principles of natural justice. Ultimately, the Revenue's appeal was allowed through remand, ensuring a fair hearing and due process.

This detailed analysis of the judgment provides a comprehensive understanding of the issues raised, the Tribunal's findings, and the subsequent actions taken to address the violations of natural justice in the legal proceedings.