2009 (8) TMI 306 - AT - Service Tax

Violation of Ex-parte order Natural Justice The appellant contending that hearing attended by them twice but postponed by adjudicating authority. Notice not received later but order passed ex-parte. In this case Tri.-(Mumbai.) held that no reasonable opportunity has been given in this matter thus the matter has to be remanded back.

Summary

Issues:
Appeal against imposition of penalty under Section 78 of the Finance Act, 1994 in the Revisional Order passed by the Commissioner of Service Tax, Mumbai.

Analysis:

1. Imposition of Penalty under Section 78:
The appellant appealed against the penalty of Rs.1,18,145 imposed under Section 78 of the Finance Act, 1994. The appellant, a health club business, was alleged to have not filed the Service Tax Return and failed to deposit the collected Service Tax amount. Although the penalty was proposed during adjudication, it was not imposed, but a demand of Rs.1,18,145 was confirmed along with interest and penalties under other sections of the Finance Act. The Commissioner of Service Tax examined the records and issued a show cause notice in 2008. The appellant failed to appear, leading to an ex parte order imposing the penalty. The appellant's representative argued that they had paid the Service Tax and faced difficulties due to premises ownership litigation. The Tribunal noted that the appellant was not given a reasonable opportunity to be heard and remanded the case back to the Adjudicating Authority for a fresh adjudication following the principles of natural justice.

2. Principles of Natural Justice:
The Tribunal emphasized the importance of providing a reasonable opportunity for the appellant to present their case before imposing penalties. The appellant's claim of facing difficulties and not receiving further notices after the initial appearance was taken into consideration. The Tribunal found that the appellant should have the chance to present their submissions before the Adjudicating Authority to ensure a fair decision based on merits. By allowing the appeal and remanding the case, the Tribunal upheld the principles of natural justice and the right to be heard.

3. De Novo Adjudication:
The Tribunal ordered a de novo adjudication by the Adjudicating Authority to reconsider the case based on the appellant's submissions and following the principles of natural justice. This decision aimed to ensure a fair process and a just outcome for the appellant, considering the procedural lapses and lack of opportunity for the appellant to present their defense adequately. The Tribunal's decision to remand the case back for de novo adjudication reflects the commitment to upholding procedural fairness and ensuring that all parties have a fair chance to present their case in legal proceedings.