2008 (1) TMI 164 - AT - Service Tax

Assessee contended that their Information Technology service will not be covered under business auxiliary service revenue contended that as per Board clarification the said service would not be covered by Information Technology therefore, it would not be excluded from the scope of business auxiliary service - contentions raised in the reply to SCN were not considered - order has been passed without giving personal hearing, there is violation of principle of natural justice matter remanded

Summary

Issues involved: Application for stay of Order-in-Original regarding service tax liability, exclusion of service under Information Technology from business auxiliary service definition, violation of principles of natural justice in adjudication process.

Analysis:

1. Application for Stay: The appellant filed for a stay of the Order-in-Original requiring pre-deposit of specified amounts to proceed with the appeal. The appellant had a contract with the State Transport Department for automation services, arguing that the service provided falls under Information Technology service, excluded from the definition of business auxiliary service under the Finance Act, 1994. The appellant raised concerns about the hurried adjudication process without a personal hearing and failure to consider their responses adequately. The Tribunal noted the appellant's grievances and decided to remand the matter to the adjudicating authority for a well-reasoned order within three months, emphasizing the need for a personal hearing to address all contentions raised.

2. Exclusion of Service under Information Technology: The appellant contended that the service provided should be excluded from the scope of business auxiliary service as it falls under Information Technology service. The Revenue, however, argued that the service does not qualify for exclusion based on Board's clarification. The Tribunal did not delve into the merits of this argument but focused on the procedural irregularities in the adjudication process, leading to the decision to remand the matter for a comprehensive review considering all contentions and ensuring a fair opportunity for the appellant to present their case.

3. Violation of Principles of Natural Justice: The appellant highlighted the lack of personal hearing and consideration of their responses during the adjudication process, alleging a violation of the principle of natural justice. The Tribunal acknowledged these concerns and deemed it necessary to uphold the principles of natural justice by directing the adjudicating authority to conduct a thorough review, grant a personal hearing, and issue a well-reasoned order within a specified timeframe. By allowing the appeal through remand, the Tribunal aimed to rectify the procedural deficiencies and ensure a fair and just resolution in accordance with the law.

In conclusion, the Tribunal's decision to remand the matter for a reevaluation by the adjudicating authority, with a focus on procedural fairness and adherence to principles of natural justice, reflects the commitment to upholding due process and providing a fair opportunity for the appellant to present their case effectively.