2008 (4) TMI 175 - AT - Service Tax

Appellant managed to get refund of the amount it had pre-deposited pursuant to the interim order of the Commissioner (Appeals) - appellant has not co-operated with the Dept. and the department has not been able to quantify the outstanding demand as per the OIA - conduct of the appellant in the facts & circumstances can t be approved matter is adjourned & CBEC is directed to look into the circumstances in which the refund was allowed & take suitable disciplinary action against erring officials

Issues:
1. Confirmation of service tax demand with penalties.
2. Appeal against order-in-appeal setting aside demand and penalties.
3. Refund of pre-deposited amount without tax liability discharge.
4. Quantification of outstanding demand and pre-deposit/stay order.
5. Appellant's non-cooperation and conduct during the proceedings.
6. Adjournment and listing of the appeal.
7. Inquiry into the refund issuance and possible disciplinary action.

Analysis:
1. The Additional Commissioner confirmed the service tax demand of Rs. 10,42,255 with various penalties under the Finance Act, 1994. The penalties included interest under section 75, equal amount penalty under section 76, daily penalty under section 77, and penalty equal to the tax amount under section 78.

2. The Commissioner (Appeals) set aside the demand of service tax on specific charges and also revoked the penalties in the order-in-appeal dated 27-0-2007. Both the appellant and the Department appealed to the Tribunal against this decision. The Department's appeals were not listed during the proceedings.

3. Concern arose during the hearing regarding the refund granted to the appellant despite the remaining tax liability as per the order-in-appeal. The Tribunal expressed confusion over the refund issuance without ensuring the discharge of the tax liability by the appellant.

4. The Tribunal deferred the appeal hearing to quantify the outstanding demand based on the Commissioner's orders and to decide on the pre-deposit/stay order under section 35F of the Central Excise Act. The appellant's lack of cooperation hindered the Department from determining the exact outstanding demand.

5. The Tribunal disapproved of the appellant's conduct and non-cooperation during the proceedings. Despite considering a positive order on pre-deposit, the Tribunal deferred its decision to allow the appellant another chance to fulfill the necessary requirements before the next hearing.

6. The appeal was adjourned to 12-5-2008 and was scheduled to be listed alongside the Department's appeals before the Bench presided over by the President, ensuring a comprehensive review of all related matters.

7. Additionally, the Tribunal directed the Central Board of Excise Customs (CBEC) to investigate the circumstances leading to the refund granted to the appellant and advised taking disciplinary action against any officials found to be at fault in accordance with the law, emphasizing the importance of procedural integrity and accountability.

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