2009 (8) TMI 446 - AT - Service Tax

Recovery of service tax- The demand of service tax has arisen on the allegation that appellants had collected the amount of service tax but not deposited the same with Government. Held that- We find that there is a violation of principle of natural justice in this case, in not providing the relied upon documents to the appellant along with show-cause notice, thus the matter needs to be reconsidered by the Adjudicating Authority. Impugned order is set aside and the matter is remanded back to the Adjudicating Authority to reconsider the issue afresh, before coming to any conclusion.

Summary

Issues:
Stay petition against waiver of pre-deposit of service tax, interest, and penalties under various sections of the Finance Act, 1994. Violation of principle of natural justice due to non-provision of relied upon documents with show-cause notice.

Analysis:
The stay petition challenged the waiver of pre-deposit of service tax, interest, and penalties under different sections of the Finance Act, 1994. The tribunal noted that the appellant had already deposited a partial amount during the proceedings, leading them to waive the pre-deposit condition and proceed with the appeal's disposal. The appellant argued that the demand arose from an allegation of collecting service tax but not depositing it with the government. They claimed improper representation before lower authorities and highlighted the ex parte nature of the impugned order. On the other hand, the Departmental Representative pointed out the appellant's non-appearance before the appellate authority and emphasized the information available in the records with the revenue department.

Upon reviewing the case records and submissions, the tribunal found a violation of the principle of natural justice. The show-cause notice failed to provide the relied upon documents to the appellant, depriving them of a fair opportunity to defend themselves. In light of this, the tribunal set aside the impugned order and remanded the matter to the Adjudicating Authority for reconsideration. The Adjudicating Authority was directed to grant the appellant a personal hearing and dispose of the matter within four months from the receipt of the tribunal's order, considering the issue's vintage from 2006. The appellant's counsel did not seek an adjournment and agreed to cooperate with the authority.

In conclusion, the stay and appeal were disposed of in accordance with the tribunal's directions. The decision highlighted the importance of upholding the principles of natural justice in administrative proceedings, ensuring a fair and transparent adjudication process for all parties involved.