2018 (6) TMI 1200 - AT - Service Tax

Principles of Natural Justice - Statement of Demand dt. 03/03/2015 was issued on the ground that the appellant has wrongly availed CENVAT credit as per the facts mentioned in para 7 of show-cause notice dt. 30/10/2013 - Held that - Since there is no finding with regard to the material issue raised by the appellant this case needs to be remanded back to the original authority to pass a fresh order considering the allegations in the Statement of Demand dt. 03/03/2015 as the same is necessary for the final disposal of the case - appeal allowed by way of remand.

Summary

Issues:
- Appellant's eligibility for availing CENVAT credit on input services.
- Alleged violation of Rule 6 of the CENVAT Credit Rules.
- Principles of natural justice in passing the impugned order.

Analysis:

Issue 1: Appellant's eligibility for availing CENVAT credit on input services
The appellant, an authorized dealer for a motor company, was registered under various service tax categories and regularly paid service tax. The dispute arose when the Department issued a statement of demand alleging wrongful availment of CENVAT credit on input services during the disputed period of 2013-14. The Department contended that the appellant was not eligible for credit on input services from other authorized service stations. The appellant challenged this denial, citing a previous Tribunal decision in their favor for a different period. The Tribunal observed that the impugned order did not address the core issue raised in the show-cause notice. Consequently, the Tribunal remanded the case to the original authority for a fresh decision, emphasizing adherence to natural justice principles.

Issue 2: Alleged violation of Rule 6 of the CENVAT Credit Rules
Apart from challenging the denial of CENVAT credit, the appellant also argued on the merit of the alleged violation of Rule 6 of the CENVAT Credit Rules. However, this argument was made without prejudice to the primary contention of setting up a new case not covered in the show-cause notice. The Tribunal did not delve into the specifics of this alleged violation due to the absence of findings on the core issue raised by the appellant.

Issue 3: Principles of natural justice in passing the impugned order
The appellant contended that the impugned order was unsustainable as it failed to appreciate the facts and law properly. The appellant argued that the authorities introduced new issues not covered in the Statement of Demand, violating the principles of natural justice. The Tribunal acknowledged the appellant's concern and directed the original authority to reexamine the case, emphasizing the need to consider the allegations in the Statement of Demand for a fair resolution. The Tribunal's decision highlighted the importance of upholding natural justice principles in administrative proceedings.

In conclusion, the Tribunal's judgment focused on the procedural fairness and adherence to legal principles in the adjudication process, emphasizing the need for authorities to address the specific issues raised in the show-cause notice and uphold the principles of natural justice throughout the proceedings.