2018 (5) TMI 2042 - AT - Service Tax

Principles of Natural Justice - demand was sought to be enforced on payments made by appellant to overseas entities for procurement of business auxiliary service' without reference to any transactions - HELD THAT - The detailed submission made by the appellant herein as response to the show cause notices, including computational errors and lack of simultaneous jurisdiction to tax under Central Excise Act, 1944 and Finance Act, 1994, have not been considered in the impugned order. In the absence of a counter to these submissions, we are unable to evaluate the claims now made before us. The adjudicating authority is required to apply its mind to the contentions for which purpose, we set aside the impugned order and remand the matter back for a fresh decision - Appeal allowed by way of remand.

Summary

Issues:
1. Tax liability determination under section 73 of Finance Act, 1994
2. Imposition of penalty under sections 77 and 78 of Finance Act, 1994
3. Enforcement of demand for payments made to overseas entities for 'business auxiliary service'
4. Consideration of submissions regarding accounting practice misinterpretation, liability discharge, and services provided outside the country
5. Evaluation of detailed submissions, computational errors, and lack of jurisdiction under Central Excise Act, 1944 and Finance Act, 1994

Analysis:
1. The appeal challenged the order-in-original by the Commissioner of Central Excise, Pune -I, which determined tax liabilities for two periods and imposed penalties under sections 77 and 78 of the Finance Act, 1994. The appellant contended that the demand was based on payments to overseas entities for 'business auxiliary service' without specific transaction references. The appellant argued that the order failed to consider submissions on misinterpretation of accounting practices, early discharge of liabilities, duties related to further manufacturing, and services provided abroad, making the findings and recovery order untenable.

2. The Tribunal noted that the appellant's detailed submissions, including computational errors and jurisdictional issues under the Central Excise Act, 1944, and Finance Act, 1994, were not adequately addressed in the impugned order. As the contentions were not countered, the Tribunal found it unable to assess the claims. Consequently, the Tribunal set aside the impugned order and remanded the matter for a fresh decision, emphasizing the need for the adjudicating authority to consider all relevant submissions before reaching a decision.

3. The decision highlighted the importance of addressing all arguments presented by the appellant and ensuring a thorough evaluation of the contentions raised, particularly concerning computational errors and jurisdictional issues. By remanding the matter for reconsideration, the Tribunal aimed to ensure a fair and comprehensive assessment of the case, emphasizing the necessity for the adjudicating authority to carefully review all aspects of the dispute before making a final determination.