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2024 (7) TMI 68 - AT - Service TaxLegality of the adjudication proceeding concluded by the Principal Commissioner on the basis of subsequent show-cause notice issued covering the period for which earlier show-cause notice was issued and adjudication was pending - confirmation of duty, interest and penalty proposed in the second show-cause notice against differential amount on Income Tax Statement and Service Tax Return. HELD THAT - It is not considered proper to discuss and analyse the issue of adjudication that was completed prior to the subsequent adjudication and its effect on the parties. What is intended to place on record is that the issue of legality of service of second show-cause notice before the first one got adjudicated has been settled way back in 2007 by the Hon'ble Punjab Haryana High Court in the case of COMMISSIONER OF C. EX., JALANDHAR VERSUS OSAKA ALLOYS AND STEELS PVT. LTD. 2007 (1) TMI 189 - HIGH COURT OF PUNJAB HARYANA AT CHANDIGARH and the same has been affirmed by the Hon'ble Supreme Court in COMMISSIONER VERSUS OSAKA ALLOYS AND STEELS (P) LTD. 2007 (9) TMI 615 - SC ORDER . There are no hesitation to give a finding that show-cause notice dated 24.12.2020 issued for the period from April, 2015 to March, 2016 proposing a demand for payment of Service Tax, when show-cause notice dated 17.10.2017 making demand covering the same period, was issued without jurisdiction and therefore, the adjudication order passed on the basis of the said show-cause notice dated 24.12.2020 is unsustainable in law. The order passed by the Principal Commissioner of CGST Central Excise, Mumbai East is hereby set aside - Appeal allowed.
Issues:
1. Legality of adjudication proceeding concluded by the Principal Commissioner based on subsequent show-cause notice. 2. Confirmation of duty, interest, and penalty proposed in the second show-cause notice against differential amounts on Income Tax Statement and Service Tax Return. Analysis: 1. The appeal challenges the legality of the adjudication proceeding concluded by the Principal Commissioner based on a subsequent show-cause notice. The Appellant, engaged in providing stock broking and trading facilities, received notices for Service Tax for the periods from July 2012 to March 2017 and April 2015 to March 2016. The second notice was issued for a differential amount noticed while comparing Service Tax Returns with Income Tax Returns. The Appellant argued that the income received towards delayed payment should not be subjected to Service Tax. The legality of the subsequent show-cause notice was questioned on the grounds of double jeopardy, citing various judicial decisions supporting the Appellant's stand. 2. The Authorised Representative supported the order passed by the Commissioner, arguing that the grounds for both show-cause notices were different, and the validity of the adjudication prior to the other one cannot be challenged on the basis of double jeopardy. The Tribunal, after considering the submissions and relevant judgments, highlighted the settled legal position regarding the issuance of a second show-cause notice before the first one is adjudicated. Referring to a specific case law, the Tribunal concluded that the second show-cause notice issued for the same period as the first notice, without the first one being adjudicated, was without jurisdiction and time-barred. Consequently, the adjudication order based on the subsequent show-cause notice was deemed unsustainable in law. Judgment: The Tribunal allowed the appeal, setting aside the order passed by the Principal Commissioner and providing consequential relief, if any. The Tribunal's decision was based on the established legal principle that issuing a show-cause notice for the same period before the prior notice is adjudicated is without jurisdiction. The judgment reaffirmed the importance of adhering to legal procedures and respecting the principles of natural justice in adjudication proceedings.
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