2015 (2) TMI 522 - AT - Service Tax

Demand of service tax - Works contract service - Held that - Nevertheless the adjudication order came to be passed against the appellant since the appellant did not reply to show-cause notice at all and did not attend the personal hearing also. After hearing the appellant and taking note of the fact that appellant is an individual and from the submissions made, it was felt that appellant has got into trouble because of ignorance of law and also peculiar circumstances which were explained in detail. We consider that appellant deserves another chance to defend himself and to make his detailed submissions. Accordingly, the impugned order is set aside and the matter is remanded to the original adjudicating authority to pass an order on merits after following principles of natural justice. - Decided in favour of assessee.

Summary

Issues:
1. Demand of service tax for works contract service in an EPC project.
2. Appellant's submission regarding no consideration received and no service rendered.
3. Adjudication order passed against the appellant due to non-response to show-cause notice.
4. Appellant's request for another chance to defend himself based on ignorance of law and peculiar circumstances.

Analysis:
1. The judgment pertains to a demand of service tax amounting to Rs. 11,13,69,782 for works contract service in an EPC project executed by the appellant between 2009-2012. The appellant, engaged as advisors and consultants in waste management and energy projects, entered into EPC contracts with two power project companies. The funds received for the projects were transferred back to the promoters' accounts, and the appellant claimed no consideration was received, thus no tax liability existed.

2. Despite the appellant's submission that no consideration was received and no services were rendered, the adjudication order was passed against the appellant as there was no response to the show-cause notice and non-attendance at the personal hearing. However, considering the appellant's individual status and the explanation provided for the lack of response, the Tribunal felt the appellant deserved another chance to present a defense. The impugned order was set aside, and the matter was remanded for a fresh decision following principles of natural justice.

3. The Tribunal acknowledged that the appellant's failure to respond was due to ignorance of the law and peculiar circumstances. It was noted that the appellant should have the opportunity to make detailed submissions and defend himself adequately. The decision to remand the matter to the original adjudicating authority was made to ensure a fair hearing and a proper consideration of the appellant's defense.

In conclusion, the judgment highlights the importance of adherence to procedural requirements and principles of natural justice in tax matters. The appellant's right to be heard and present a defense was upheld, leading to the setting aside of the initial order for a fresh consideration based on the merits of the case.