2007 (1) TMI 179 - AT - Service Tax

Denial of opportunity of personal hearing adjudicating authority proceeded to decide the matter on the basis of the reply and the case papers on record - Assistant Commissioner in impugned order confirmed the said adjudicating order without considering violation of principles of natural justice hearing at the appellate stage cannot substitute the hearing which was required to be given by the adjudicating authority - impugned orders are set-aside - matter remanded to adjudicating authority

Summary

Issues:
Denial of opportunity of personal hearing at the adjudication stage.

Analysis:
The case involved the denial of the opportunity of personal hearing to the appellant during the adjudication stage. The revenue issued a show cause notice proposing the recovery of service tax from the appellant. The appellant contended that the show cause notice could not be issued under the provisions of Section 73 of the Finance Act, 1994. Despite the appellant's request for a personal hearing, no such hearing was provided by the adjudicating authority. The Assistant Commissioner confirmed the demand, imposed penalties, and ordered interest to be paid without granting a personal hearing. The Appellate Commissioner upheld the adjudication order without addressing the issue of the lack of personal hearing, relying on a previous Tribunal decision.

The Appellate Tribunal noted that no personal hearing was given to the appellant, as requested, during the adjudication process. The Tribunal emphasized that the denial of a personal hearing violated the principles of natural justice. The Tribunal set aside the impugned orders and remanded the matter to the adjudicating authority for a fresh decision in accordance with the law. The Tribunal stressed the importance of providing a personal hearing at the adjudication stage, stating that a hearing at the appellate stage could not substitute the required hearing by the adjudicating authority. The appeal was allowed by way of remand, emphasizing the need for expeditious resolution within a specified timeframe.

In conclusion, the judgment highlighted the significance of granting a personal hearing to the appellant at the adjudication stage to adhere to the principles of natural justice. The lack of a personal hearing was deemed a clear violation of procedural fairness, leading to the setting aside of the impugned orders and remanding the matter for a fresh decision with the directive to provide a personal hearing.