2023 (10) TMI 506 - HC - Service Tax

Legality of impugned proceedings - non-service of SCN - alleged suppression of facts under Proviso to Section 73(1) of the Finance Act, 1994 - invocation of extended period of limitation of five years for initiation of proceedings - willful suppression of facts or fraud - Order-in-Original has been passed after the delay of 02 months 11 days from the last date of personal hearing - violation of the Circulars issued by the Central Board of Indirect Taxes and Customs. HELD THAT - In the instant case, it is admitted that the Impugned Order/ Adjudication Order was not communicated to the Petitioner within one month from the closure of the personal hearing and there are no reasons recorded by the Respondent for the delay in communicating the Impugned Order beyond the stipulated period of one month after closure of the personal hearing. Consequently, the Impugned Order is in clear contravention of the said circulars of the Revenue Department. So far as the quantification of delay in communication of the Impugned Order is concerned, there are two scenarios. One is considering the alleged date of last personal hearing as provided in the Impugned Order. Other is considering the valid and lawful date of last personal hearing. As per the alleged date of last personal hearing i.e., 08.03.2022 as provided in the Impugned Order is concerned, the Impugned Order was communicated to the security guard of the building, where the Petitioner has its office, on 27.05.2022 i.e., after 2.5 months against the required period of 1 month. In the present case since there was no prior notice served to the Petitioner for the alleged personal hearings on 20.01.2022 and 08.03.2022, therefore both the alleged personal hearings are in contravention to Clause 14.3 of the said Circular. Thus, both the alleged personal hearings cannot be considered to be valid personal hearings. The last personal hearing, as provided in the Impugned Order, for which notice was served to the Petitioner was on 23.12.2021. Cconsidering 23.12.2021 as the last date of valid personal hearing, the Impugned Order dated 19.05.2022 which was communicated to the petitioner on 27.05.2022, has thus been communicated to the Petitioner six months after the last valid personal hearing. Accordingly, the Impugned Order is in violation to Clause 14.10 of the Master Circular dated 10.03.2017 read with Clause 4.3 of the Instruction dated 18.11.2021 issued by CBIC which provides for communication of the adjudication order within one months from the conclusion of personal hearing. Thus, interest of justice would be sufficed by remitting this case back to the Respondent No. 4 to pass a fresh order after giving an opportunity of hearing as the impugned order has been passed against the prescribed period as indicated in aforesaid Circular. Consequently, the matter is remitted back to the respondent No. 4 to pass a fresh order after giving opportunity of personal hearing to the petitioner and pass a fresh order. Application allowed.

Summary

Issues Involved:
1. Non-existence and service of Show Cause Notice (SCN).
2. Violation of Circulars issued by the Central Board of Indirect Taxes and Customs.
3. Jurisdiction and period of limitation.

Summary:

1. Non-existence and service of Show Cause Notice (SCN):
The petitioner argued that the SCN adjudicated was not served to them and seemed non-existent. The court found that although there was a typographical error in the SCN number, the petitioner had replied to the letters and submitted a defense against the SCN. Therefore, the court did not interfere with this issue.

2. Violation of Circulars issued by the Central Board of Indirect Taxes and Customs:
The petitioner contended that the impugned order violated the Circulars issued by the Central Board of Indirect Taxes and Customs, specifically Clauses 14.10 of the Master Circular No. 1053/02/2017-CX dated 10.03.2017, and Clause 4.3 of the Instructions dated 18.11.2021. The court upheld this contention, noting that the adjudication order must be communicated within one month from the closure of personal hearing, which was not done in this case. The court cited precedents emphasizing the binding nature of such circulars and instructions on the Revenue Department.

3. Jurisdiction and period of limitation:
The petitioner argued that the impugned order was passed beyond the normal period of limitation and lacked jurisdictional facts for invoking the extended period of limitation. The court did not interfere with this issue, stating that it involves factual interpretation and can be adjudicated by the appropriate authority. The petitioner was given the liberty to refer this issue if advised.

Conclusion:
The court remitted the case back to the Respondent No. 4 to pass a fresh order after giving an opportunity for a personal hearing to the petitioner. The court did not address other issues and merits of the case, allowing the petitioner to raise those issues before the respondent No. 4. The application was allowed, and any pending I.A. was closed.