2023 (3) TMI 536 - AT - Service Tax

Violation of principles of natural justice - services provided by the appellants of providing scores of candidates appearing in the CAT Examination conducted by IIM-Ahmedabad to other IIMs was covered under Mailing List Compilation and Mailing Service or not - SCN issued by invoking extended period of limitation - HELD THAT - The appellant has tried to produce some evidences to justify that the service was indeed provided to education institutions. However since there is finding to the contrary and appellants have not been given a fair chance to produce all evidences in support of their claim even in a matter where Commissioner (Appeals) was differing from findings of the original authority and has done his own fact findings there has been violation of natural justice. He has only provided limited opportunity to the appellants to rebut the fresh case and the same needs to be afforded fully to allow to produce all evidences to justify their claim. Appellants have also raised the legal issue of whether the sequel demand by way of a letter only will be justified in the facts and circumstances of the case. The limited opportunity afforded to the appellants in view of specific facts of this case whereby the order-in-original has been differed with does not meet the ends of justice and full opportunity to adduce evidence needs to be afforded by the Commissioner (Appeals). Appeal is allowed by way of remand.

Issues Involved:
1. Whether services provided by the appellants of providing scores of candidates appearing in the CAT Examination to other IIMs are covered under "Mailing List Compilation and Mailing Service"?
2. Whether the show cause notice issued for an extended period justifies a sequel demand show cause notice for a later period?
3. Whether the appellants were denied a fair chance to produce evidence in support of their claim for exemption meant for educational institutions?
4. Whether the sequel demand by way of a letter only is justified in the circumstances of the case?

Analysis:
1. The main issue in this case was whether the services provided by the appellants, involving sending scores of candidates in the CAT Examination to other IIMs, fell under the category of "Mailing List Compilation and Mailing Service." The adjudicating authority initially ruled against the appellant, but the Commissioner (Appeals) later found that the services provided after the negative list came into force did not seem legally correct. However, the Commissioner (Appeals) denied the exemption meant for educational institutions to the appellant, stating that no evidence was provided that the services were solely provided to educational institutions. The Tribunal found a violation of natural justice as the appellants were not given a fair chance to produce all evidence supporting their claim. The matter was remanded for the Commissioner (Appeals) to allow the appellants to present all evidence to justify their claim.

2. The issue of whether a show cause notice issued for an extended period could justify a sequel demand show cause notice for a later period was also raised. The Tribunal concluded that the limited opportunity given to the appellants did not meet the ends of justice. It directed the Commissioner (Appeals) to conduct further fact findings and afford the appellants a full opportunity to adduce evidence, including addressing the legal arguments regarding the validity of the demand letter and the existence of a detailed show cause notice.

3. The appellants contended that they were denied a fair chance to produce evidence supporting their claim for exemption meant for educational institutions. The Tribunal noted that the appellants were not given a full opportunity to present all evidence, leading to a violation of natural justice. The matter was remanded for the Commissioner (Appeals) to allow the appellants to produce all evidence in support of their claim and to address the legal arguments raised by the appellants.

4. Lastly, the legal issue of whether a sequel demand by way of a letter only was justified in the circumstances of the case was raised. The Tribunal directed the Commissioner (Appeals) to thoroughly examine any evidence, conduct further fact findings, and provide the appellants with the opportunity to rebut the findings. The Commissioner (Appeals) was instructed to address the legal arguments regarding the validity of the demand letter and the existence of a detailed show cause notice put forth by the appellants.

In conclusion, the appeal was allowed by way of remand, emphasizing the need for a full opportunity for the appellants to present evidence and address legal arguments.

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