2015 (4) TMI 172 - AT - Service Tax

Demand of service tax - Manpower recruitment or supply agency services - Violation of principle of natural justice - Opportunity of hearing not granted - Held that - Grievance of learned Counsel of the appellant as to they were not given an effective to personal hearing seems to be correct. We find that the adjudicating authority has confirmed substantial amount as service tax liability without affording another opportunity to the appellant for defending the case personally. In our view, the impugned order is passed in violation of principles of natural Justice. - Matter remanded back - Decided in favour of assessee.

Summary

Issues: Violation of principles of natural justice in passing order, classification of services provided by appellant, request for remand to adjudicating authority for reconsideration.

In the present case, the appellant was alleged to have provided services falling under the category of manpower recruitment or supply agency services without discharging the service tax liability for the years 2005-06, 2006-07, and 2007-08. The revenue authorities issued a show cause notice, and the adjudicating authority, in an ex-parte decision, confirmed the demands of service tax liability, interest, and imposed penalties as the appellant did not avail the opportunity of personal hearing. The appellant contended that the impugned order violated the principles of natural justice as they were not granted an effective personal hearing. The appellant argued that they were actually providing cleaning services for hospital premises, not manpower recruitment services, citing statements and agreements as evidence. The appellant requested a remand to the adjudicating authority for reconsideration based on the classification of services rendered. The departmental representative reiterated the findings of the adjudicating authority.

Upon considering the submissions, the Tribunal found merit in the appellant's argument regarding the violation of principles of natural justice in the adjudication process. The Tribunal observed that the adjudicating authority had confirmed a significant amount of service tax liability without providing the appellant with a proper opportunity to defend the case personally. Therefore, the impugned order was set aside, and the matter was remanded back to the adjudicating authority for a fresh consideration. The Tribunal clarified that no observations on the merits of the case were made, leaving all issues open for the adjudicating authority to decide after ensuring due process. The appellant was directed to cooperate with the adjudicating authority during the reconsideration process.

In conclusion, the Tribunal's decision focused on the procedural aspect of natural justice, highlighting the importance of providing a fair opportunity for the appellant to present their case. The remand to the adjudicating authority aimed to ensure a proper reconsideration of the classification of services provided by the appellant, emphasizing the need for a thorough examination of evidence and adherence to legal principles.