2008 (9) TMI 211 - AT - Service Tax

Ex-parte order by original authority plea that tax demanded in SCN is time barred, was not considered by original authority submission that Tax is not leviable in respect of the activities of Security Services carried out during the period October, 1999 to January, 2005 - further submission is that the Service Tax can be levied only on the amounts realized but not on the billed amounts - in the interest of justice, the matter is remanded to the Original Authority for de novo consideration

Summary

Issues:
1. Non-service of show-cause notice leading to ex parte proceedings.
2. Time-barred demands exceeding 5 years.
3. Service Tax liability on 'Security Services' activities.
4. Levying Service Tax on realized amounts vs. billed amounts.
5. Lack of hearing by the Original Authority violating principles of natural justice.

Analysis:
1. The appellant contended non-service of the show-cause notice and ex parte proceedings before the Original Authority. They sought an opportunity to respond, emphasizing the demands being time-barred, exceeding 5 years. Additionally, they argued against the levy of Service Tax on 'Security Services' activities during a specific period.

2. The learned SDR opposed the appellant's prayer, highlighting the absence of show-cause notice service and the alleged breach of natural justice principles. However, upon careful consideration, the Tribunal observed the lack of a hearing before the Original Authority, necessitating a review of the time-barred Service Tax demands exceeding 5 years.

3. The Tribunal acknowledged the appellant's right to be heard and the importance of considering their submissions regarding the time-barred demands. Consequently, the matter was remanded to the Original Authority for a fresh examination, ensuring the appellant's reply is duly considered, and the principles of natural justice are adhered to in the proceedings.

4. In the interest of justice, the Tribunal directed the Original Authority to reevaluate the case, specifically addressing the appellant's contentions regarding the Service Tax liabilities on 'Security Services' activities and the distinction between levying tax on realized amounts versus billed amounts. The Tribunal emphasized the need for a comprehensive review following the principles of natural justice.

5. Ultimately, the Tribunal remanded the stay application and appeal to the Original Authority for a de novo consideration, emphasizing the importance of affording the appellant a fair opportunity to present their case and addressing all pertinent issues, including the time-barred demands, Service Tax liabilities, and the principles governing the taxation of 'Security Services' activities.