2016 (3) TMI 486 - HC - Service Tax

Validity of Tribunal s order - Not considered various points - Held that - as the Tribunal did not considered various points raised by the appellant including whether Commissioner of service tax had the jurisdiction to impose penalty under Section 78 of the Central Excise Act, 1944 for a period prior to 13th May 2005? Whether there was deliberate intent on the part of the Appellant to evade tax? Whether there is any fraud, collusion, wilful misstatement, suppression of facts or contravention of any of the provisions of the Act and Rules made thereunder etc. Therefore, the Tribunal s order is the most unsatisfactory and an unreasoned order and liable to be quashed and set aside. - Decided in favour of appellant

Summary

Issues:
Appeal against CESTAT order, unsatisfactory reasoning in impugned order, jurisdiction of Commissioner of Service Tax to impose penalty, non-consideration of raised questions by CESTAT, payment of duty and interest by Appellant, imposition of penalty under Sections 76 and 78 of the Act, extension of relevant period under Section 73(1) proviso, ambiguity in law regarding tax evasion, works contract tax implications, lack of consideration of issues by CESTAT, quashing of impugned order, restoration of appeal to CESTAT for detailed consideration.

Analysis:
The High Court of Bombay heard an appeal against the order passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in which the Appellants raised substantial questions of law for decision. The Court noted the unsatisfactory nature of the impugned order by CESTAT, highlighting the lack of reasoning provided for their conclusion, leading to a narrow controversy surrounding the case.

The case involved the Appellant Company providing civil and mechanical construction services, facing an enquiry initiated by the Directorate General of Central Excise Intelligence. Despite paying a significant amount towards alleged short payment of service tax before the issuance of a Show Cause Notice, the Appellant was later demanded to pay the same amount again, along with interest and penalties by the Commissioner of Service Tax, which the Appellant contested in appeal to CESTAT.

The Appellant's counsel argued that the Commissioner lacked jurisdiction to impose penalties for a period prior to a specific date and that the Appellant had already paid the duty and interest, questioning the necessity of the Show Cause Notice. Additionally, it was contended that no deliberate intent to evade tax existed, attributing the non-deposit of tax to legal ambiguities. The Court emphasized the failure of CESTAT to consider these crucial issues raised by the Appellant, leading to the quashing of the impugned order and restoration of the appeal to CESTAT for a thorough examination.

In conclusion, the High Court directed CESTAT to reconsider the appeal, record findings on all raised issues, and decide the case on its merits without influence from previous orders. The Court maintained a neutral stance on the issues raised, leaving all contentions open for further deliberation by the Tribunal.