2017 (1) TMI 926 - AT - Service Tax

Reverse charge - Natural justice - all the submissions required to made by the appellant before the adjudicating authority, are not done - Held that - adjudicating authority, should be extended an opportunity to look into the merits of the detailed submissions of the appellant before appellate forum - appellant should be directed to appear before the adjudicating authority, for making the detailed submission as made before us so that the adjudicating authority can appreciate and pass an order on merits - appeal allowed by way of remand.

Summary

Issues: Service Tax liability on amounts paid to persons abroad for various expenses, imposition of penalties under Sections 76, 77 & 78, failure to file detailed replies to show-cause notice, need for appellant to make detailed submissions before adjudicating authority, principles of natural justice.

In this case, the Appellate Tribunal CESTAT Mumbai considered an appeal against an Order-in-Original regarding Service Tax liability on payments made to individuals abroad for different expenses. The issue revolved around the demand raised under Section 66A of the Finance Act, 1994, utilizing the reverse charge mechanism and penalties imposed under Sections 76, 77 & 78 for the period from 01.04.2006 to 31.03.2010. The appellant argued that the charges were not taxable and presented case laws to support their position. However, it was noted that the appellant failed to file detailed replies to the charges during the adjudication proceeding, despite seeking time for the same. The Tribunal observed that the appellant's submissions should have been made before the adjudicating authority for proper consideration. Therefore, in the interest of justice, the Tribunal directed the appellant to submit detailed explanations to the adjudicating authority within four weeks for a reevaluation of the case. The adjudicating authority was instructed to provide a personal hearing, review the submissions, and make a decision based on merits, emphasizing the principles of natural justice.

The Tribunal refrained from expressing any opinion on the case's merits and set aside the impugned order, remanding the matter back to the adjudicating authority for a fresh review while ensuring the appellant's cooperation. The decision highlighted the importance of the appellant participating in the process, filing submissions on time, and attending personal hearings as required. The appeal was disposed of through remand, emphasizing the need for a fair and thorough reconsideration of the case by the adjudicating authority following the principles of natural justice.