2018 (11) TMI 849 - AT - Service Tax

Principles of natural justice - opportunity of cross-examine not provided - Manpower Requirement Agency services - Held that - Appellant has been all along perusing its case from the day it receipt Order-in-Original after making an application before the authority to provide him a copy, upon receipt of telephonic communication concerning Service Tax demand with interest and penalties. Thus, it is sufficient proof to establish that appellant is interested to defend his stand soon after it had gone to its knowledge and it has been moving through the appellant forums seeking natural justice by way of providing opportunity of being heard - the appellant s stand that it had no knowledge about such issue of show-cause notice and passing of Order-in-Original is not without any basis. Commissioner (Appeals) could have provided him an opportunity of being heard to ensure the natural justice and it is well within his jurisdiction to do so, since Section 35(A)(3) empowers the Commissioner (Appeals) to make such further enquiry as may be necessary to pass such order as he things just and proper. Appeal allowed by way of remand.

Summary

Issues:
Challenge to Service Tax demand based on violation of principles of natural justice.

Analysis:

1. Factual Background:
The appellant, a works contract service provider, challenged a Service Tax demand of &8377; 1,77,382/- for 'Manpower Requirement Agency' services. The appellant alleged not being provided with an opportunity to be heard before the duty demand was confirmed by the Commissioner of GST & Central Excise (Appeals), Nagpur-I.

2. Violation of Principles of Natural Justice:
The appellant contended that the department resorted to unfair practices by relying on forged documents. The appellant argued that the order was passed without giving them a chance of personal hearing or a show-cause notice. Citing various case references, the appellant emphasized the violation of rules of the principle of natural justice.

3. Department's Response:
The Department, through its Assistant Commissioner, supported the order passed by the Commissioner (Appeals), stating that a full opportunity was granted to the appellant, which they did not avail of at the appropriate occasion.

4. Tribunal's Observations:
After hearing both sides and examining the case records, the Tribunal noted that the appellant had actively pursued their case upon receiving the Order-in-Original and the telephonic communication regarding the Service Tax demand. The Tribunal found it hard to believe that the appellant was unaware of the show-cause notice and the hearing before the Adjudicating Authority. The Tribunal held that the Commissioner (Appeals) should have provided the appellant with an opportunity to be heard to ensure natural justice, as empowered by Section 35(A)(3).

5. Decision:
The Tribunal allowed the appeal by remanding the case back to the Commissioner (Appeals) for fresh adjudication. The Commissioner (Appeals) was directed to provide the appellant with an opportunity to defend their case in accordance with the principles of natural justice.

In conclusion, the Tribunal's decision highlighted the importance of adhering to principles of natural justice in tax matters and emphasized the right of the appellant to be heard before confirming any duty demands.