2022 (7) TMI 522 - AT - Service Tax

Service of SCN - Ex-parte order - ex parte order-in-original is silent as regards the manner in which the show cause notice was served - violation of principles of natural justice - HELD THAT - The appellant had raised the issue of non-service of show cause notice before the Commissioner (Appeals). The appellant had also raised the ground with regard to limitation, as the demand was raised for the period July, 2012 to March, 2013, vide show cause notice issued in April, 2018. It has also been contended before the Commissioner (Appeals) that the appellant had deposited the admitted tax of Rs.6,66,286/- vide 18 challans in March, 2015. From the impugned order, it appears that the Commissioner (Appeals) has dismissed the appeal for want of pre-deposit without making any inquiry with regard to the claim of the appellant that they have already deposited the tax amount of Rs.6,66,286/-. Further, that the Commissioner (Appeals) has not recorded any finding with regard to the ground of non-service of the show cause notice, which goes to the root of the matter. No valid adjudication order can be passed, without proper service of show cause notice. This appeal by way of remand to the Commissioner (Appeals) with the directions to ascertain the claim of the appellant that they have deposited an amount of Rs.6,66,286/-. If the same is correct, then the appellant has satisfied the requirement of Section 35 F. Further, before proceeding on merits, the Commissioner (Appeals) shall inquire from the Adjudicating Authority as to the manner of the service of the show cause notice and shall obtain a copy of the evidence thereof. If no show cause notice has been served, in that case, the order-in-original is ab initio void. Only upon satisfaction with regard to the service of the show cause notice, the Commissioner (Appeals) shall proceed to decide the case on merits.

Summary

Issues:
1. Service of show cause notice by Adjudicating Authority.
2. Non-service of show cause notice and limitation.
3. Dismissal of appeal for want of pre-deposit.
4. Lack of inquiry by Commissioner (Appeals).
5. Validity of adjudication order without proper service of show cause notice.

Analysis:
The primary issue in this appeal before the Appellate Tribunal CESTAT NEW DELHI is whether the show cause notice was properly served on the appellant by the Adjudicating Authority. The ex parte order-in-original lacks information on the manner in which the notice was served, raising doubts about the validity of the notice. The appellant had raised concerns about non-service of the notice and the limitation period before the Commissioner (Appeals), emphasizing that the demand was for a period from July 2012 to March 2013, with the notice issued in April 2018. Additionally, the appellant had deposited the admitted tax amount in March 2015.

The Tribunal noted that the Commissioner (Appeals) dismissed the appeal due to non-compliance with pre-deposit requirements without investigating the appellant's claim of tax payment. Furthermore, the Commissioner (Appeals) failed to address the crucial issue of non-service of the show cause notice, which is fundamental to the adjudication process. It was highlighted that a valid adjudication order cannot be issued without proper service of the show cause notice.

In light of these observations, the Tribunal decided to allow the appeal through remand to the Commissioner (Appeals) with specific directions. The Commissioner (Appeals) was instructed to verify the appellant's claim of tax payment and investigate the manner in which the show cause notice was served. If the notice was not served properly, the order-in-original would be considered void. The Commissioner (Appeals) was directed to proceed with the case on merits only after confirming the service of the notice. The appellant was also asked to appear before the Commissioner (Appeals) with a copy of the Tribunal's order to seek a hearing opportunity. Consequently, the impugned order was set aside, and the appeal was allowed by way of remand for further proceedings.