2019 (11) TMI 59 - AT - Service Tax

Principles of Natural Justice - no effective personal hearing was granted to the appellant before deciding the matter afresh - HELD THAT - The de novo adjudication proceedings were not completed in proper manner inasmuch as the findings recorded in the order dated 12.08.2014 of the Tribunal has not been properly adhered to. Therefore, the matter should again be remanded to the original authority for a fresh fact finding on all the issues involved in the case. Accordingly, the matter is remanded to the original authority for re-adjudication. The appeal is allowed by way of remand to the original authority.

Summary

Issues:
- Violation of principles of natural justice in granting personal hearing
- Adjudication beyond the scope of remand direction
- Arbitrary method employed in confirming tax demand
- Duplication of demand for different periods and locations
- Failure to adhere to findings of the Tribunal

Violation of Principles of Natural Justice:
The appeal was directed against the order passed by the Commissioner of Service Tax, where the appellant argued that the principles of natural justice were violated as no effective personal hearing was granted before deciding the matter afresh. The appellant highlighted that the personal hearing notice did not reference the show cause notice in question, leading to a lack of proper adherence to the remand order. Consequently, the Tribunal concluded that the de novo adjudication proceedings were not completed correctly, necessitating a remand to the original authority for a fresh fact-finding on all issues involved.

Adjudication Beyond the Scope of Remand Direction:
The appellant contended that the Order in Original (OIO) confirmed demands on charges not included in the Show Cause Notice (SCN), exceeding the amount raised in the SCN. Additionally, the OIO went beyond the remand direction by confirming tax demands on charges like Currency Adjustment Charge and Advance Manifest Charge, which were not part of the initial issue. The Tribunal acknowledged these discrepancies and decided to remand the matter for re-adjudication to ensure all aspects are considered properly.

Arbitrary Method in Confirming Tax Demand:
It was argued that the OIO used an arbitrary method to confirm demands by subtracting data given on remand from the original proceeding data, resulting in an excessive demand amount. This approach was deemed beyond the remand direction, necessitating a fresh examination of the matter to rectify the procedural irregularities and ensure a fair adjudication process.

Duplication of Demand and Failure to Adhere to Tribunal Findings:
The appellant raised concerns about duplication of demands for different periods and locations, pointing out that demands for periods beyond the scope of the SCN were confirmed. Moreover, new issues were introduced in the OIO, such as commenting on pure reimbursement and referencing Service Tax Valuation Rules 2006, deviating from the Tribunal's remand directions. The Tribunal emphasized the need for a comprehensive re-adjudication that considers all aspects involved in the case to avoid further remands, setting a timeline of 3 months for the completion of the proceedings with a granted opportunity for a personal hearing to the appellant.

In conclusion, the appeal was allowed by way of remand to the original authority for a thorough re-adjudication process to address the procedural lapses and ensure a fair and comprehensive examination of all issues involved in the case.