2015 (3) TMI 436 - HC - Service Tax

Tribunal had passed the exparte order directing pre-deposit - Construction of residential complex - services rendered by the appellant to the Tamil Nadu Slum Clearance Board - Held that - The finding that there was abuse of process of law on account of the counsel seeking adjournment, that too for the first time after being engaged, appears to this Court to be too harsh. It is evident from proviso to Section 35-C of the Central Excise Act, that even in respect of appeals, the Tribunal is entitled to grant adjournment not exceeding three times, to a particular party. The finding of the Tribunal relating to abuse of process of law, warrants leniency and the matter deserves to be relooked into for which course the learned senior counsel for the appellant is fully agreeable and more so, accepts that a specific date be fixed for hearing. Therefore, accepting the plea of the appellant, this Court, while setting aside the order passed by the Tribunal, remands the matter back to the Tribunal for reconsideration of the application filed for waiver of pre-deposit to be heard on 18.3.2015, which date, it is stated, that the appeal has been posted for reporting compliance of the order of the Tribunal. It is made clear that the appellant/assessee will not seek further adjournment and the discretion as to adjourning the matter is left to the Tribunal on the date of hearing, if the matter so requires.

Summary

Issues:
1. Tribunal's order for pre-deposit without hearing
2. Allegation of service tax liability on services rendered
3. Tribunal's decision on appellant's non-appearance and adjournment requests
4. Appellant's plea for waiver of pre-deposit

Issue 1: Tribunal's order for pre-deposit without hearing
The appellant challenged the Tribunal's order directing pre-deposit without granting an opportunity of hearing. The Tribunal based its decision on the appellant's non-cooperation during adjudication proceedings, leading to an ex-parte order. The Tribunal emphasized the appellant's ineffective participation, causing prejudice to the interest of justice. The Tribunal ordered a substantial pre-deposit, citing the appellant's non-cooperative behavior as the reason for the decision.

Issue 2: Allegation of service tax liability on services rendered
The case involved the jurisdictional Commissioner demanding service tax on services provided by the appellant to the Tamil Nadu Slum Clearance Board. The Commissioner alleged that the construction of a residential complex service rendered by the appellant attracted service tax liability. The appellant's senior counsel argued that there was no service tax liability, citing relevant case laws to support the claim of no liability.

Issue 3: Tribunal's decision on appellant's non-appearance and adjournment requests
The Tribunal noted the appellant's non-appearance and perceived dilatory tactics as an abuse of process of law. Despite the appellant's submission of adjournment requests, the Tribunal deemed the requests as an abuse of process. The Tribunal observed that granting adjournment after the initial request was unnecessary. The appellant's counsel explained the reasons for non-appearance, citing personal reasons for seeking adjournment, which the Tribunal did not find acceptable, leading to the order for pre-deposit.

Issue 4: Appellant's plea for waiver of pre-deposit
The appellant sought a waiver of pre-deposit, arguing that the Tribunal's decision was too harsh given the circumstances. The appellant's counsel highlighted procedural errors in the Tribunal's handling of adjournment requests and emphasized the need for leniency. The High Court, considering the appellant's arguments, set aside the Tribunal's order and remanded the matter back for reconsideration of the application for waiver of pre-deposit. The Court scheduled a specific date for the hearing, instructing the appellant not to seek further adjournments.

Overall, the High Court allowed the appeal by remanding the matter back to the Tribunal for reevaluation of the waiver of pre-deposit application, emphasizing the need for a fair consideration of the appellant's plea and procedural aspects in the case.