2018 (1) TMI 1270 - AT - Service Tax

Rectification of error - The matter was heard by Tribunal in the absence of the appellant / counsel and ex-parte order was passed - also, it was pointed that the appellant has paid the disputed amount of service tax after issuance of Show Cause Notice which is factually wrong - Held that - the appellant had filed an intimation seeking adjournment dt. 22.11.2016. The appeal was taken up for hearing on 29.11.2016 and ex-parte order was passed. It appears that the intimation was not placed before the Bench - The Order-in-Original reflects that disputed amount of service tax has been paid by the appellant much before the issuance of SCN and the same has been appropriated by the adjudicating authority - there is an error apparent on the face of record which needs to be rectified - ROA application allowed.

Summary

Issues involved:
1. Application to recall final order passed by Tribunal dated 29.11.2016.
2. Error in final order regarding payment of disputed service tax amount before Show Cause Notice.
3. Opposing the application for recalling final order.
4. Recalling final order due to error apparent on the face of record.
5. Penalties imposed under section 78 set aside due to payment of service tax before Show Cause Notice.

Analysis:

1. The appellant filed an application seeking to recall the final order passed by the Tribunal dated 29.11.2016, citing personal difficulties that prevented their counsel from being present during the hearing. The counsel had requested an adjournment on 22.11.2016, which was not considered, leading to an ex-parte order being passed. The appellant pointed out an error in the final order where it was incorrectly noted that the disputed service tax amount was paid after the Show Cause Notice was issued, whereas it was actually paid before. The appellant sought rectification of this error by recalling the final order.

2. The respondent opposed the application for recalling the final order, arguing that the appeal had been decided on merits after serving notice on the appellant. The respondent contended that there were no sufficient grounds to recall the final order passed by the Tribunal.

3. After hearing both sides, the Member (Judicial) examined the impugned final order and the documents presented. It was observed that the appellant had indeed paid the disputed service tax amount before the issuance of the Show Cause Notice, contrary to what was noted in the final order. Recognizing this as an error apparent on the face of the record, the Member decided to recall the final order.

4. In addition to rectifying the error in the final order, the Member further analyzed the merits of the case. Referring to relevant legal provisions and precedents, it was highlighted that if the service tax amount is paid before the issuance of the Show Cause Notice, penalties should not be imposed. Citing specific cases and judgments, the Member set aside the penalties imposed under section 78 while confirming the service tax, interest, and penalty under section 77.

5. Consequently, the appeal was partly allowed with the penalties under section 78 being set aside. The Member disposed of the application accordingly, providing consequential relief as necessary. The decision was dictated and pronounced in open court, bringing the matter to a resolution.