Bhatia Shipping Private Limited Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
Summary: The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeal filed by Bhatia Shipping Private Limited by way of remand, setting aside the adjudication order dated 8 February 2021 for the limited purpose of verifying documents relating to a service tax demand of ₹84,12,507. The Tribunal directed the original adjudicating authority to examine the available records, including the reconciliation statement and Chartered Accountant’s certificate, and pass a fresh order after granting the appellant an opportunity of personal hearing.
The dispute arose in the second round of litigation concerning the appellant’s service tax liability. In the first round, the Tribunal had passed Order No. A/496 to 498/13/CSTB/C-I dated 21 February 2013, remanding the matter because the adjudicating authority had not examined a reconciliation statement submitted by the appellant. The earlier remand required consideration of the reconciliation statement and Chartered Accountant’s certificate concerning payment of service tax, including the appellant’s contention regarding possible double taxation and reimbursements.
Following the earlier remand, the original authority conducted de novo adjudication and passed an order dated 8 February 2021. It confirmed service tax demand of ₹84,12,507 arising from show cause notices covering 2004-05, 2005-06, 2012-13 and 2013-14. However, it dropped the remaining demand of ₹80,42,504 for 2006-07 to 2011-12 after considering the reconciliation statement and Chartered Accountant’s certificate. Interest and penalties under the Finance Act, 1994 were also confirmed.
The adjudicating authority confirmed the remaining demand because the appellant had not submitted the required supporting records within the prescribed time. The appellant had assured the authority that the records would be furnished but failed to provide them. Its letter dated 2 February 2021 did not explain the failure to submit the documents. The Tribunal observed that the original authority had complied with its earlier remand directions by adjudicating the matter on the basis of the documents available before it.
During the appeal hearing, counsel for Bhatia Shipping submitted that the appellant had sought additional time to produce the records but could not arrange them during the relevant period. Counsel further stated that the reconciliation statement and Chartered Accountant’s certificate were now available and could be examined by the adjudicating authority. Considering this submission, the Tribunal found it appropriate to provide another opportunity for verification of the documents.
Accordingly, the Tribunal set aside the impugned order and remanded the matter for the limited purpose of examining records relating to the confirmed service tax demand of ₹84,12,507. It directed the adjudicating authority to grant a personal hearing before passing a fresh order. The appellant was also instructed to cooperate with the proceedings and avoid unnecessary adjournments. The appeal was allowed by way of remand, without any final determination on the substantive tax liability.
Cases Discussed: No separate judicial precedent was cited or discussed in the supplied order. The Tribunal referred to its earlier remand order in the same proceedings.
FULL TEXT OF THE CESTAT MUMBAI ORDER
Heard both sides and perused the records.
2. This is the second round of litigation before the Tribunal. In the first round, the adjudication order dated 31.07.2012 was appealed against before the Tribunal. The Tribunal vide Order No. A/496 to 498/13/CSTB/C-I dated 21.02.2013 had remanded back the matter to the original authority, with the following observations:
“We have perused the impugned order. We find the learned adjudicating authority has dismissed the appellant’s contention on the ground that they did not produce Chartered Accountant’s certificate to satisfy the department that the duty is being demanded for the second time or that they have paid duty on the value of reimbursements received by them. Inasmuch as the appellant has submitted the reconciliation statement, though belatedly, and the same has not been taken into account by the adjudicating authority, the matter needs to go back to the adjudicating authority to examine the reconciliation statement and also the Chartered Accountant’s certificate with regard to the payment of service tax and, thereafter decide the matter afresh with regard to the service tax liability of the appellant. Needless to say that the appellant should be heard before passing any order on fresh consideration. All issues are kept open for decision.”
3. Pursuant to the said order dated 21.02.2013, the original authority took-up de novo adjudication proceedings and passed the impugned order dated 08.02.2021 in confirming an amount of Rs.84,12,507/- as proposed for recovery in the SCN dated 21.10.2009 issued for the period 2004-05 & 2005-06 and SCNs dated 11.10.2013 & 16.01.2015 for the period 2012-13 & 2013-14. In the said order, the original authority has dropped the balance amount of demand of Rs.80,42,504/- for the period 2006-07 to 2011-12. Besides, the impugned order has also confirmed the interest demand and imposed penalties under various provisions of the Finance Act, 1994.
4. The original authority has dropped the proposed demand of Rs.80,42,504/- on the ground that as per the requirement of the Order dated 21.02.2013 the assessee-appellant had provided the Reconciliation Statement together with the certificate issued by the Chartered Accountant. The balance demand of Rs.84,12,507/- was confirmed by him on the ground that the assessee-appellant though assured to provide the records did not submit the records within the time frame fixed by the original authority. Further, no reason was given by the assessee-appellant for their non-submission of records in their letter dated 02.02.2021 to the original authority. On perusal of the impugned order, we find that the Order dated 21.02.2013 passed by the Tribunal has been duly complied with by the original authority by passing the impugned order on the basis of available documents.
5. When the matter was called for hearing today, learned Advocate submitted that though the appellant had prayed for extension of time for submission of the required documents, but the same were not arranged during the material time and the original authority has passed the order in confirming the adjudged demands. He further submitted that the reconciliation statement and the certificate issued by the Chartered Accountant are available with the appellant for examination by the original authority. Since, the appellant through its Advocate submits that the desired documents are available for verification, we are of the view that the matter should go back to the original authority for verification of the records/ documents and for passing of the adjudication order accordingly.
6. Therefore, the impugned order is set aside and the matter is remanded back to the original authority for the limited purpose of examination of the records/documents with regard to the confirmation of service tax demand of Rs.84,12,507/- confirmed in the impugned order as referred above and for passing of the adjudication order on the basis of the available records. Needless to state that opportunity of personal hearing should be granted to the appellant before passing of the fresh adjudication order. The appellant is also directed to cooperate with the adjudication proceedings and should not insist for unnecessary adjournment.
7. In the result, the appeal is allowed by way of remand.
(Operative part of the order pronounced in the open court)
