2014 (1) TMI 566 - AT - Service Tax

Non remittance of service tax - Transportation of passengers by air - Notification No. 15/2010-Service Tax dated 27.02.2010 - Held that - total non application of mind to a claim of the assessee predicated upon a statutory rule, amounts to abdication of adjudicating responsibilities and derogates from the functional responsibilities of adjudication. The adjudication order is perverse and invites invalidation - matter remitted for de novo consideration by the said authority. On remit as ordered herein, the adjudicating authority shall issue a notice to the appellant for personal hearing and on consideration of its submission shall pass a fresh order clearly dealing with the appellant s claim for exclusion of the component of statutory levies and charges, on the basis of the Service Tax (Determination of Value) Rules, 2006 amended in 2010, w.e.f. 27.02.2010. The adjudicating authority shall now and without fail record reasons while dealing with the assessee s claim on the basis of 2006 Rules - Decided in favour of assessee.

Summary

Issues: Non-remittance of service tax and other statutory fees collected by the petitioner, failure of the adjudicating authority to discuss the appellant's claim for exclusion of statutory levies and charges.

Analysis:

The judgment by the Appellate Tribunal CESTAT NEW DELHI dealt with the issue of non-remittance of service tax and other statutory fees by the appellant for the period December 2010 to December 2011. The appellant had claimed exclusion of various statutory levies and charges, such as transportation tax, customs user fee, and passenger facility fee, collected from passengers based on the provisions of Rule 6(2)(v) of the Service Tax (Determination of Value) Rules, 2006. However, the adjudicating authority failed to discuss the appellant's claim, which was deemed as a total non-application of mind, leading to an erroneous adjudication order.

The Tribunal observed that the failure to consider the appellant's claim, especially when it was based on a statutory rule, amounted to an abdication of adjudicating responsibilities. This lack of proper consideration was viewed as a serious flaw that invalidated the adjudication order. Consequently, the Tribunal quashed the original order passed by the Commissioner of Service Tax, New Delhi and remitted the matter for de novo consideration. The adjudicating authority was instructed to issue a notice for a personal hearing to the appellant and to pass a fresh order addressing the appellant's claim for exclusion of statutory levies and charges in accordance with the relevant rules amended in 2010.

In conclusion, the Tribunal allowed the appeal and directed the matter to be remitted for denovo determination, emphasizing the importance of providing reasons while dealing with the appellant's claim based on the applicable rules. This comprehensive analysis highlights the significance of proper adjudication procedures and adherence to statutory rules in tax matters, ensuring a fair and just outcome for all parties involved.