2012 (11) TMI 169 - AT - Service Tax

Whether liability to pay Service tax determined after issue of show-cause notice was proper or not - Held that - Impugned order is set aside and matter is remanded to the Commissioner (Appeals) for fresh decision after taking note of the grounds of appeal by revenue in appeals filed before the Tribunal and after giving reasonable opportunity to the respondents to present their case if they desire to do so.

Summary

Issues:
1. Discrepancy in mentioning appeals in the order.
2. Liability of service tax on construction activities.
3. Rejection of refund claim.
4. Interpretation of provisions of Section 73 of Finance Act, 1994.

Analysis:
1. The judgment highlighted a discrepancy where three appeals were listed, but the order only mentioned two appeals. The Ld. AR pointed out the error and emphasized the correct identification of the appeals. Despite the discrepancy, as no party filed a ROM application, the judge decided to issue another order on the same issue to rectify the error.

2. The respondent, engaged in construction activities, was investigated for constructing a residential complex with 12 units, leading to a service tax liability. The partners admitted the liability, made payments, and later filed a refund claim. The original adjudicating authority held that the construction involved more than 12 units, justifying the service tax payment. However, on appeal, it was argued that since no show-cause notice confirming the payment was issued, the amount paid was considered a deposit, and the rejection of the refund was deemed improper. The Revenue appealed this decision.

3. The learned A.R. contended that the Commissioner did not consider the provisions of Section 73(3) of the Finance Act, 1994, and failed to address the correctness of the service tax liability determined post the show-cause notice. Both parties agreed that these crucial issues were not adequately addressed in the impugned order, necessitating a remand for fresh consideration by the Commissioner (Appeals) to ensure a comprehensive examination of the grounds of appeal and a fair opportunity for the respondents to present their case.

4. Consequently, the impugned order was set aside, and the matter was remanded for a fresh decision, emphasizing the need for a thorough review of the issues raised by the revenue in their appeals and granting the respondents a fair chance to present their arguments. The judgment concluded by pronouncing the operative portion of the order in court, ensuring clarity and procedural correctness in the legal proceedings.