2019 (3) TMI 1512 - AT - Service Tax

Valuation - Commercial or Industrial Construction Service - quantum of abatement - N/N. 15/2004-ST dated 10.09.2004 and N/N. 01/2006 dated 01.03.2006 - no reasonable opportunity for personal hearing accorded to appellant - principles of natural justice - Held that - Although personal hearing was adjourned on two occasions (to 21.07.2011 and 25.08.2011), there does not seem to be any evidence in the Order that a third opportunity was provided after receipt of the relied upon documents as permissible by proviso to Section 33A (2) of the Central Excise Act, 1944, as applicable to service tax matters. This being the case, the impugned Order suffers from lack of natural justice accorded to appellants to present their case. It is proper to remand the matter back to the adjudicating authority for de novo proceedings - appeal allowed by way of remand.

Summary

Issues: Lack of natural justice in personal hearing leading to an ex parte order

The judgment by the Appellate Tribunal CESTAT Chennai involved a case where the appellants were involved in Civil Construction contracts for textile mills and other industries. The Department alleged that the appellants failed to include the cost of materials provided by clients in the contract value, leading to the denial of abatement. The Original Authority confirmed a demand for service tax liability, interest, and penalties. During the hearing, the appellant's advocate argued that the appellants were not given a reasonable opportunity for a personal hearing before the adjudicating authority. The respondent's representative, however, stated that the appellants had confirmed receiving relevant records but did not attend the personal hearing. The Tribunal noted that while the personal hearing was adjourned twice, there was no evidence of a third opportunity provided after receiving documents, leading to a lack of natural justice. Consequently, the Tribunal remanded the matter back to the adjudicating authority for fresh proceedings with sufficient opportunities for the appellant to present their case.

In summary, the key issue in this judgment was the lack of natural justice in the personal hearing process, which resulted in the appellants not being able to adequately present their case, leading to the order being issued ex parte. The Tribunal emphasized the importance of providing sufficient opportunities for a fair hearing and remanded the case for de novo proceedings to ensure procedural fairness.