2014 (3) TMI 603 - AT - Service Tax

Penalty u/s 78 - Violation of principle of natural justice - Held that - allegations were labeled on the Appellant for non-payment of Service Tax on the gross taxable value received and reflected in their balance sheets for the respective years. However, from the records we find that the Appellant was not given sufficient opportunity to explain his position in relation to the allegations made in the show cause notice - minimum number opportunities of hearing as laid down under Section 33A of the Central Excise Act, 1944 made applicable to the Service Tax cases has not been adhered to in the present case. In these circumstances, we are of the view that the case be remitted to the original authority for re-consideration of the matter afresh - Decided in favour of assessee.

Summary

Issues: Application seeking waiver of pre-deposit of Service Tax and penalty under Section 78 of the Finance Act, 1994.

The judgment pertains to an Application seeking waiver of pre-deposit of Service Tax amounting to Rs.79.26 Lakhs and an equal penalty imposed under Section 78 of the Finance Act, 1994. The Applicant, through their Consultant, argued that they were not given adequate opportunity to respond to the show cause notice, which led to an ex-parte order. The Consultant contended that the total amount demanded was incorrect and offered to deposit an approximate liability of Rs.15.00 Lakhs for fresh adjudication. The Revenue's representative acknowledged the lack of proper hearing opportunities but proposed terms for remanding the case. The Tribunal decided to dispose of the Appeal immediately instead of keeping it pending, considering the interests of justice and the consent of both parties.

Upon review, the Tribunal found that the Appellant was indeed not afforded sufficient opportunity to present their case regarding the alleged non-payment of Service Tax based on their balance sheets. It was noted that the minimum required number of hearing opportunities under Section 33A of the Central Excise Act, 1944, applicable to Service Tax cases, was not provided in this instance. Consequently, the Tribunal decided to remit the case back to the original authority for a fresh consideration. The Appellant, having acknowledged a liability of around Rs.15.00 Lakhs and offering to deposit the same, was directed to make the deposit within eight weeks and report compliance directly to the adjudicating authority. The Commissioner was instructed to re-examine the issue after the deposit, ensuring the Appellant receives all relevant documents and a fair hearing opportunity within thirty days of document receipt. As a result, the impugned order was set aside, and the Appeal was allowed by way of remand, with the Stay Petition being disposed of accordingly.