2023 (11) TMI 891 - AT - Service Tax

Disallowance of CENVAT Credit - recovery of service tax with penalty and interest - neither the appellant appeared for personal hearing nor any reply to the show cause notice was filed by the appellant - HELD THAT - Though, learned counsel for the appellant submitted that the issues can be decided by the Tribunal, but it is opined that it would be appropriate to remand the matter to the adjudicating authority to decide these issues in the first instance as we are satisfied that not only had the appellant filed replies to the show cause notice but had also filed written submissions and additional written submissions and had also appeared on some dates before the adjudicating authority. The impugned order mistakenly records a finding that a reply was not filed by the appellant. The matter is remitted to the adjudicating authority to decide it afresh after taking into consideration the reply submitted by the appellant as also the written submissions and after providing adequate opportunity of hearing to the appellant - appeal allowed by way of remand.

Summary

Issues Involved:
The appeal seeks to quash the order disallowing CENVAT credit and ordering recovery of service tax with penalty and interest passed by the Commissioner of Service Tax, New Delhi-II.

Detailed Judgment:

Issue 1: Failure to Appear for Personal Hearing and File Reply
The order indicated that the appellant did not appear for personal hearing or file a reply to the show cause notice. However, the appellant's counsel argued that a detailed reply was indeed filed on 23.04.2012, and the appellant had appeared for personal hearings on multiple occasions, submitted additional replies, and written submissions. The Tribunal found that the appellant had made efforts to respond to the notice, leading to the conclusion that the order mistakenly recorded a finding of non-submission by the appellant.

Issue 2: Remand of the Matter
The Tribunal, despite the appellant's request for the Tribunal to decide the issues, decided to remand the matter to the adjudicating authority. This decision was based on the acknowledgment that the appellant had actively participated by filing replies, submissions, and attending hearings. The Tribunal believed it was appropriate for the adjudicating authority to decide the issues initially.

Issue 3: Delay in Adjudication
The appellant cited section 73 (4B) of the Finance Act, 1994, and a judgment of the Delhi High Court to argue that the delay of 5 years in adjudicating the show cause notice warranted setting aside the impugned order. The Tribunal noted that this argument could be raised by the appellant before the adjudicating authority for consideration.

Conclusion:
The Tribunal set aside the order dated 30.03.2017 and remitted the matter to the adjudicating authority for fresh consideration. The adjudicating authority was instructed to review the appellant's submissions, provide a hearing opportunity, and make a decision expeditiously, preferably within four months from the date of the order. The appeal was allowed based on the reasons stated above.