2024 (5) TMI 330 - AT - Service Tax

Exemption from service tax - Business Auxiliary Service - providing transportation of agricultural produce - Exemption as per Sl.No.21 22 of the Mega N/N. 25/12 dt. 20.06.2012 - De-novo order passed by the adjudicating authority during the pendency of the appeal - HELD THAT - The Commissioner (Appeals) vide order impugned in this appeal had remanded the matter. It is to be noted that the present appeal has been filed by the appellant after complying with the mandatory predeposit. Prior to 06.08.2014 the Section 35F of Central Excise Act as made applicable by Section 83 of Finance Act 1994 included the procedure to file stay application along with appeal. The Tribunal then had to consider the stay applications and direct to make predeposit in order to grant stay of recovery of the demand by the department. After introduction of new Section 35F w.e.f 1.8.2014 the assessee has been cast with the responsibility of making a mandatory predeposit. The procedure of filing stay application has been given away with. The requirement to make mandatory predeposit implies that the recovery proceedings are stayed during pendency of the appeal before the Tribunal. Coming to the merits of the case the Commissioner (Appeals) has analysed the issue and after considering the submissions made by the appellant that they are eligible for exemption under Sl.No.21 22 of Notification No.25/2022 has remanded the matter to verify whether the transportations were made for agricultural produce. Taking note of this fact as well as the submissions made by the learned counsel at the time of hearing the matter requires to be remanded to the adjudicating authority who is directed to look into the documents produced by the appellant with regard to transportation of goods. In case the transportation is for agricultural produce the appellant is eligible for exemption. The matter requires to be decided on merits as well as on limitation and is remanded to the adjudicating authority leaving all issues open - appeal is allowed by way of remand to the adjudicating authority.

Summary

Issues involved: The issues involved in the judgment are non-payment of service tax for a specific period and the subsequent legal proceedings challenging the demand, interest, and penalties imposed by the original authority. The judgment also addresses the procedural irregularities in passing a de novo order by the adjudicating authority during the pendency of the appeal before the Tribunal.

Issue 1: Non-payment of service tax and legal challenge

The appellant was found to have not paid service tax for the period from October 2016 to June 2017. The Department issued a show cause notice proposing to demand the service tax, interest, and penalties. The original authority confirmed the demand, interest, and penalties, leading the appellant to appeal before the Commissioner (Appeals). The appellant contended that they were engaged in providing transportation of agricultural produce, claiming exemption under specific notifications. The Commissioner (Appeals) remanded the matter for fresh consideration by the adjudicating authority. The appellant then appealed to the Tribunal against this order.

Issue 2: Procedural irregularity in passing de novo order

During the appeal process, the adjudicating authority proceeded with de novo adjudication despite the appellant's request to keep the matter in abeyance due to the pending appeal before the Tribunal. This led to the authority passing a de novo order confirming the demand. The appellant challenged this order in the High Court through a Writ Petition, resulting in a direction for the Tribunal to dispose of the appeal within a specified time frame.

Decision:

The Tribunal found that the original authority's hasty passing of the de novo order during the pendency of the appeal was a violation of natural justice and set aside the order. The Tribunal emphasized the importance of the mandatory predeposit by the appellant and the stay of recovery proceedings during the appeal process. On the merits of the case, the Tribunal remanded the matter to the adjudicating authority to examine the appellant's eligibility for exemption based on the transportation of agricultural produce and to consider the issue of limitation. The Tribunal allowed the appeal by remanding the case to the adjudicating authority for fresh proceedings within a specified time frame.

This summary provides a detailed overview of the issues involved in the legal judgment, highlighting the key arguments and decisions made by the Tribunal regarding non-payment of service tax and procedural irregularities in the adjudication process.