2011 (2) TMI 854 - AT - Service Tax

Duplication of demand - Appellant-assessee has not filed reply to the SCN eventhough nearly a year has lapsed after issue of the SCN - The order-in-original records that the personal hearings were given on 19.1.09, 5.3.09, 25.3.09 and 30.3.09. Ld. consultant submitted that they received only the notice for hearing fixed on 5.3.2009 and other notices have not been received - Though this claim appears not convincing, the fact remains that the order of the original authority has been passed without the benefit of reply from the party and without hearing the party - Prima facie, there are discrepancies in the order of original authority involving duplication of demand and in the amount shown as paid by the assessee - Appellant-assessee fairly points out that permitting of cum tax benefit by the Commissioner (Appeals) was wrong, as the service tax amount stands subsequently collected by them from the recipient - Therefore, set aside the order of the Commissioner (Appeals) and that of the original authority and remand the matter to the original authority for fresh consideration.

Summary

Issues:
1. Appeal against the order of the Commissioner (Appeals) by the assessee and the department.
2. Discrepancies in the service tax demand and payments made by the appellant.
3. Imposition of penalty under Section 78 of the Finance Act.
4. Lack of reply to the Show Cause Notice (SCN) by the appellant.
5. Errors in the order of the original authority.
6. Need for reconsideration of the matter by the original authority.

Analysis:
1. The appeal before the Appellate Tribunal CESTAT, Chennai involved M/s. Sri Adhava Constructions challenging the order of the Commissioner (Appeals) while the department filed a separate appeal seeking enhancement of penalty equal to the service tax demand confirmed. The Tribunal heard both sides on the matter.

2. The appellant, engaged in commercial and industrial construction services, received a mobilization advance and subsequently faced a show-cause notice proposing a service tax demand. The original authority confirmed the demand, appropriated payments, and imposed a penalty. The Commissioner (Appeals) reduced the demand, interest, and penalty after considering submissions from both parties. The appellant argued discrepancies in the amount paid, calculation errors, and lack of awareness regarding service tax laws.

3. The appellant contended that the penalties imposed were excessive due to genuine misunderstandings and errors in the calculation of service tax amounts. The department sought to set aside the Commissioner (Appeals) order and restore the original authority's decision. Discrepancies in the amounts deposited and adjustments made were acknowledged by the department.

4. The Tribunal noted the appellant's failure to respond to the SCN adequately and highlighted discrepancies in the original authority's order, including duplication of demand and incorrect amounts shown as paid. The matter required fresh consideration due to disputed facts and the need for verification of the service tax and interest amounts claimed to have been paid by the appellant.

5. Considering the disputed facts and errors in the original authority's order, the Tribunal set aside the Commissioner (Appeals) and original authority's decisions, remanding the matter for fresh consideration. The appellant was directed to submit a reply with relevant documents, and the original authority was instructed to reevaluate the case promptly.

6. The Tribunal disposed of both appeals, emphasizing the need for a reevaluation of the matter by the original authority to address the discrepancies and factual disputes effectively. All issues were kept open for further consideration and resolution.