2015 (2) TMI 93 - AT - Service Tax

Extension of time to file reply to the show cause notice. - Adjudicating Authority without accepting or rejecting their requests for such extensions, passed the order - Held that - If an assessee has been causing appearance before the Adjudicating Authority on each and every date of hearing so fixed by him, and is making a request for extension of time, the Adjudicating Authority is under a legal obligation to respond to the said request either by extending the period or by rejecting the request. If the Adjudicating Authority was of the view that the appellants are intentionally delaying the proceedings, he could have rejected the request and made the same known to the assessee at the time of hearing on 24-10-2013. Non-communication of the decision, on the said requests, keeps an assessee in dark, who may entertain a view that such request stands granted by the Adjudicating Authority and he would file the reply within the extended period. - Matter remanded back - Decided in favour of assessee.

Issues Involved:
1. Failure to follow principles of natural justice by Adjudicating Authority.
2. Repeated requests for extension of time to file reply to show cause notice.
3. Lack of response from Adjudicating Authority regarding extension requests.
4. Passing of impugned order without defense reply on record.
5. Setting aside impugned order and remanding the matter for fresh decision.
6. Expectation for Adjudicating Authority to conclude proceedings within 2 months.

Analysis:

1. The judgment highlighted the failure of the Adjudicating Authority to adhere to the principles of natural justice. The appellant had already deposited a significant amount during investigations, and the Tribunal found that the Adjudicating Authority did not follow the required procedures. Consequently, the Tribunal decided to proceed with the appeal without the condition of pre-deposit of balance amounts.

2. The appellants had been consistently requesting extensions to file a reply to the show cause notice. The Tribunal noted that the requests were made due to changes in counsel and the need to procure orders from other authorities regarding their distributors. Despite the repeated requests, the Adjudicating Authority failed to respond to these extension requests, leading to delays in the proceedings.

3. The Tribunal observed that the last date of hearing provided by the Adjudicating Authority was not followed by a clear acceptance or rejection of the request for an extension of time. This lack of communication regarding the extension request created confusion for the appellant, who might have assumed that the request was granted. The impugned order was passed within a short period after the last hearing date, without a defense reply on record.

4. Due to the absence of a defense reply on record and the failure of the Adjudicating Authority to respond to extension requests, the Tribunal set aside the impugned order and remanded the matter for a fresh decision. The Tribunal emphasized the importance of ensuring that the appellant files a detailed reply, which the appellant claimed was ready, and that the Adjudicating Authority provides a reasonable opportunity for a hearing.

5. Considering the significant revenue involved in the appeal, the Tribunal directed the Adjudicating Authority to conclude the proceedings within a strict timeline of two months. This expectation was set to ensure expeditious resolution of the matter and to uphold the principles of justice and efficiency in the legal process.

6. The judgment concluded by disposing of the stay petition and appeal in the manner outlined, emphasizing the need for procedural fairness and timely resolution of the case.

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