2024 (1) TMI 962 - AT - Service Tax

Principles of natural justice - appeal of the department allowed ex-parte - order passed without affording an opportunity of hearing to the appellant - exemption to Health Care Services - HELD THAT - The Ld. Commissioner (Appeals) has allowed the appeal of the department ex-parte without giving adequate and proper opportunity of hearing to the appellant - the Commissioner in para 4 only mentioned the date of personal hearing but did not record the fact that hearing notices were served on the appellant and in spite of service of the notice the appellant did not appear. Further, the department has also not been able to establish the actual service of notice of hearing by Commissioner (Appeals). Since, the order was passed without affording an opportunity of hearing to the appellant in spite of the fact that Original Authority has allowed the claim of the appellant. This case needs to be remanded back to the Commissioner (Appeals) with a direction to decide the matter afresh on merits after giving proper and adequate opportunity of hearing to the appellant - Appeal allowed by way of remand.

Summary

Issues:
The issues involved in the judgment are the evasion of service tax on medical check-ups for immigration services and the entitlement of the appellant to exemption from service tax under Notification No. 25/2012- Service Tax.

Summary:

Issue 1: Evasion of Service Tax
The appellant, a partnership firm providing medical services to patients and visa aspirants, was alleged to have evaded service tax on medical check-ups for immigration services. The investigation revealed that the services provided were not considered part of healthcare services, as they were not for identifying or diagnosing diseases for treatment. A show cause notice was issued, demanding the recovery of service tax, interest, and penalties. The appellant filed a reply, and the adjudicating authority initially dropped the proceedings. However, the Commissioner (Appeals) set aside the Order-in-Original in favor of the department, leading to the present appeal.

Issue 2: Ex-Parte Decision
The appellant argued that the impugned order was unsustainable as it was passed without properly appreciating the facts and law. They contended that the order violated the principles of natural justice, as they did not receive copies of the appeal filed by the department or notices of personal hearings. The appellant claimed that the appeal was decided ex-parte without affording them an opportunity to be heard, thus violating their rights. The department asserted that hearing notices were sent to the appellant, but they failed to appear.

Judgment:
After hearing both parties and examining the record, it was found that the Commissioner (Appeals) had allowed the appeal ex-parte without providing adequate hearing opportunities to the appellant. The absence of evidence showing the actual service of hearing notices on the appellant raised concerns about the fairness of the proceedings. Consequently, the case was remanded back to the Commissioner (Appeals) with directions to decide the matter afresh on merits after ensuring proper and adequate opportunities for the appellant to be heard. The impugned order was set aside, and the Commissioner was instructed to dispose of the matter within three months of receiving the certified copy of the order. The appeal was disposed of by way of remand.