2009 (2) TMI 174 - AT - Service Tax

Violation of Natural Justice held that - appellant was prevented to reply to the show-cause-notice, since the unit was closed. He has no hesitation to submit entire facts & figures before the ld. Adjudicating Authority, if an opportunity of hearing is granted by the said authority. In the absence of hearing of the appellant, an order of adjudication was passed levying Service-tax demand of Rs. 1,65,764/- and other consequences for failure to pay Service Tax by the appellant under the are have flown - violation of natural justice cannot be said to be curable defect matter remitted for fresh decision

Summary

The appellate tribunal CESTAT, New Delhi, consisting of S/Shri D.N. Panda and Rakesh Kumar, heard an appeal from an appellant represented by Shri S. Malhotra Advocate against a service tax demand of Rs. 1,65,764 levied by the adjudicating authority due to the appellant's failure to respond to a show-cause notice. The appellant, through Shri Malhotra, argued that due to the closure of the unit, they were unable to reply to the notice and requested an opportunity to present all facts and figures before the adjudicating authority. The appellant, having been directed by the Commissioner (Appeals) to make a pre-deposit of 50% of the tax and penalty demanded, appealed to the tribunal on grounds of natural justice not being followed. The tribunal, after hearing both sides, concluded that the violation of natural justice was not a curable defect and thus dispensed with the pre-deposit requirement. The matter was sent back to the adjudicating authority for further hearing, with the appellant instructed to make an appearance and reply to the show-cause notice on May 14, 2009. The adjudicating authority was directed to fix a date for hearing, listen to the appellant, and issue any necessary orders as per the law. The tribunal concluded by stating that both the stay application and appeal were handled accordingly. The judgment was pronounced during an open court session.