2021 (11) TMI 553 - AT - Service Tax

Delayed/Non-service of SCN - Time Limitation - present adjudication has to be rejected for preliminary reason that the show cause notice was never served upon the appellant within the maximum period as provided under the statute i.e. within the period of 5 years - HELD THAT - The non-service of SCN during the period of 5 years, as pleaded by the appellant, is very much apparent from the documents. A letter sent by the appellant to Dy. Commissioner concerned as received by the Department on 15th October, 2018 appears to be the reply to the impugned SCN given by the appellant with the clear mention that the said SCN was never received by them. The perusal thereof reflects that appellant has specifically mentioned about the SCN dated 25.4.2018 to have been received only on 17.9.2018 due to the same being earlier served on the wrong addresses. Facts remains are that the SCN was never served upon the appellant. Question of receiving the same does not at all arises. The said non-service is the sufficient violation of the statutory mandate. In the given circumstances, the order of remanding the matter to pass an order after verification that too for a period only of 3 months, as passed by Commissioner (Appeals) is opined to not to be sustainable in the eyes of law, for the reason of violation of basic principle of natural justice that the opportunity of being heard was never been provided to the appellant. Since there was no valid service of SCN same cannot sustain and accordingly is to be set aside - the proposal of demand therein cannot be confirmed - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Validity of the show cause notice service within the statutory period.
2. Correctness of the address for service of notice.
3. Registration status of the appellant and its impact on the demand raised.
4. Compliance with principles of natural justice regarding opportunity of being heard.

Analysis:

Issue 1: Validity of the show cause notice service within the statutory period
The appellant contended that the show cause notice (SCN) was not served within the maximum period of 5 years as required by the statute. The appellant argued that the SCN was served at a wrong address, and they only became aware of it through a letter received later. The Tribunal observed that the non-service of the SCN within the statutory period was evident from the documents. The appellant had explicitly mentioned the non-receipt of the SCN within the stipulated time frame. The Tribunal found that the failure to serve the SCN within the prescribed period was a violation of the statutory mandate.

Issue 2: Correctness of the address for service of notice
The appellant highlighted discrepancies in the address where the SCN was served compared to the address mentioned in the registration certificate. The Tribunal noted that the appellant was not registered before 2014, and there was no evidence to support the demand for the years prior to registration. The Tribunal emphasized that the non-service of the SCN and other notices at the correct address was unreasonable and a violation of natural justice principles. The Tribunal concluded that the incorrect service address and lack of explanation from the Department rendered the order unsustainable.

Issue 3: Registration status of the appellant and its impact on the demand raised
The Tribunal scrutinized the appellant's registration status and the absence of evidence supporting the demand for the years before registration. It was established that the appellant was not registered before 2014, and no documentation justified the demand for earlier periods. The Tribunal emphasized that the demand raised without proper verification and based on incorrect addresses was unjustifiable.

Issue 4: Compliance with principles of natural justice regarding opportunity of being heard
The Tribunal highlighted the importance of providing the appellant with an opportunity to be heard as a fundamental principle of natural justice. It was noted that the appellant was not given a fair chance to respond to the SCN due to incorrect service and lack of communication. The Tribunal concluded that the order remanding the matter without ensuring proper service and opportunity for the appellant was unsustainable.

In conclusion, the Tribunal set aside the order under challenge, ruling in favor of the appellant based on the violations of statutory provisions, incorrect service of notices, and lack of opportunity for the appellant to present their case effectively. The appeal was allowed, and the demand proposed in the impugned order was not confirmed.