2018 (3) TMI 768 - AT - Service Tax

Principles of Natural Justice - Till the recovery notice was served on them, they were unaware of proceedings launched against them commencing with the issue of SCN - Held that - it is clear from the order of the original authority that the demand has been confirmed without affording the appellant an opportunity of being heard or for submitting reply to the SCN - this constitutes a violation of the principles of natural justice and it is only appropriate that the matter should be heard afresh - appeal allowed by way of remand.

Summary

Issues:
Challenge to liability based on violation of principles of natural justice; Appeal dismissed on the ground of limitation; Failure to afford appellant an opportunity of being heard; Violation of principles of natural justice; Remand for fresh decision after giving due notice for personal hearing.

Analysis:

1. The appellant, M/s. Ocean Gate Container Terminal P.Ltd., challenged the liability imposed on them citing a violation of principles of natural justice. They contended that they were unaware of the proceedings initiated against them until the recovery notice was served, leading to their inability to participate in the hearings or respond to the show-cause notice and order-in-original. The Tribunal noted the appellant's argument regarding lack of notice and participation due to the absence of knowledge about the proceedings.

2. The appellant had taken steps to obtain the order of the original authority and subsequently filed an appeal before the Commissioner of Central Excise, Mumbai. However, the appeal was dismissed on the grounds of limitation. The Tribunal acknowledged the appellant's efforts in pursuing the matter through the appropriate channels but observed the dismissal based on the limitation.

3. The Authorized Representative for the respondent argued that the notice for personal hearing was sent via 'Express Mail Service' and emphasized the non-compliance with the time frame prescribed in section 85 of the Finance Act, 1994. The Tribunal considered the submission regarding the mode of sending the notice and the statutory time frame for filing an appeal.

4. Despite the arguments presented by both sides, the Tribunal found that the demand had been confirmed by the original authority without providing the appellant with an opportunity to be heard or respond to the show-cause notice. This lack of procedural fairness was deemed a violation of the principles of natural justice by the Tribunal.

5. In light of the procedural irregularities and the violation of natural justice principles, the Tribunal concluded that a fresh hearing was necessary. The impugned order was set aside, and the matter was remanded to the original authority for a fresh decision. The Tribunal directed that the appellant should be given due notice for a personal hearing to ensure a fair opportunity to present their case.

6. The Tribunal allowed the appeal by way of remand, emphasizing the importance of adherence to natural justice principles in administrative proceedings. The judgment highlighted the significance of providing parties with a fair chance to be heard and participate in the adjudicatory process to uphold the principles of procedural fairness and justice.