2013 (7) TMI 704 - AT - Service Tax

Violation of principle of natural justice - Notice of hearing of stay application not forwarded to assessee s counsel - CIT A passed ex-parte order - Held that - impugned order is unsustainable for violation of due process as the was denied a fair and reasonable opportunity to pursue the stay application, pending the substantive appeal, before the Commissioner (Appeals) and the order which directed the appellant to remit the penalty component is also unsustainable as the same was passed without adequate notice - Decided in favour of assessee.

Summary

Issues:
- Appeal against rejection for non-compliance with pre-deposit order
- Violation of due process in passing the stay application order
- Unsustainability of the order directing penalty remittance without adequate notice

Analysis:
1. The appeal was filed against the rejection of the appeal by the Commissioner (Appeals) due to non-compliance with the pre-deposit order. The Assistant Commissioner had passed an adjudication order determining the liability to service tax and confirming penalties. The appellant requested an adjournment for the stay application hearing but the Commissioner decided the application ex-parte, directing the deposit of the penalty amount without mentioning the liability for service tax or interest. The Tribunal found the impugned order unsustainable for denying a fair opportunity to pursue the stay application.

2. The Tribunal held that the order directing the appellant to remit the penalty amount was passed without adequate notice, violating due process. Consequently, the order dated 20.03.2013 and the order dated 16.01.2013 in the stay application were set aside. The appeal and the stay application were restored for fresh disposal by the Commissioner (Appeals). The Commissioner was directed to issue notice to the appellant's consultant for adequate representation, disentitling the appellant from claiming an independent notice.

3. The Tribunal emphasized that the appeal should be adjudicated in accordance with the order in the stay application and any pre-deposit compliance by the assessee. The appeal was allowed, rendering the stay application infructuous. The judgment highlighted the importance of due process and fair opportunities in legal proceedings, ensuring proper representation and notice to all concerned parties for a just outcome.