2013 (8) TMI 603 - AT - Service Tax

Manner of Service of Notice - CENVAT credit - The assesse built a commercial complex and rented out to various customers - the adjudicating authority observed that the notice had been served on the assesse - Held that - There was no proper service of the notice on the assesse in respect of show-cause notice was concerned - Therefore there was clear violation of the principles of natural justice - Sending show-cause notice through courier was not an approved mode of service envisaged under Section 37C of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 - The show-cause notice was sent to the assesse through courier - another copy of the said notice was sent which was returned undelivered. Navaratna S. G. Highway Prop. (P.) Ltd. Versus Commissioner of Service Tax, Ahmedabad 2012 (7) TMI 316 - CESTAT, AHMEDABAD - Any summon or notice to the party had to be sent by registered post with acknowledgement due, to the person for whom it is intended or his authorized agent, or by affixing a copy of the same in the business premises of the person or by displaying the same in the notice board of the office which issued the notice - From the records it was seen that none of these modes had been followed by the Revenue - The matter had went back to the original adjudicating authority for service of the show-cause notice afresh to the assesse and assesse should be given opportunity to make their submissions against said show-cause notice and only thereafter, the order confirming any demand can be passed against the assesse Appeal Allowed by way of Remand.

Summary

Issues:
1. Proper service of show-cause notice dated 5.6.2009.
2. Eligibility of appellant for CENVAT Credit on construction services for rented premises.

Analysis:

Issue 1: Proper service of show-cause notice dated 5.6.2009
The appellant contended that they did not receive the show-cause notice dated 5.6.2009, leading to a violation of natural justice. The adjudicating authority, however, presumed proper service based on the notice being sent via a courier agency. The Tribunal observed that the mode of service via courier did not comply with the approved methods under relevant laws. As the notice was not served properly, it was deemed a violation of natural justice. The matter was directed to be remanded for fresh service of the notice to the appellant, allowing them the opportunity to respond before any demand confirmation.

Issue 2: Eligibility of appellant for CENVAT Credit on construction services for rented premises
The appellant claimed eligibility for CENVAT Credit on Service Tax paid for construction services for the rented commercial complex. They argued that since the building was rented out and Service Tax was being paid, they should be allowed to avail the credit. The appellant relied on legal precedents, including a decision by the Hon'ble High Court of Gujarat and Tribunal judgments, supporting their position. The Tribunal noted the precedents and directed the adjudicating authority to provide a clear finding on the appellant's eligibility for the credit in light of the legal interpretations cited.

In conclusion, the appeals were allowed by way of remand, keeping all issues open for further consideration. The Tribunal emphasized the importance of proper service of notices and the need for a detailed assessment of the appellant's eligibility for CENVAT Credit based on legal precedents.