Case Law Details
It is settled legal position that consequent to amendment of Section 35A (3) w.e.f. 11.05.01, Commissioner (A) has no powers of remand. Therefore, the order of the Commissioner (A) requires to be set aside.
It is not known as to why the Assistant Commissioner chose not to give a personal hearing which is a clear violation of Principles of Natural Justice. The original authority has shown total disregard for the principles of natural justice in not granting personal hearing before passing the adjudication order. There is no indication that the respondent was delaying the adjudication proceedings as the reply has been promptly submitted by the respondents as has been duly noted by the original authority. He has held that the respondents have not produced any evidence to prove that the charge raised by them on the main service provider has been included on the tenable value of the main service provider. Apparently, the documents could not be produced by the respondents before the original authority. No doubt, that the matter could be directed to be dealt with by the Commissioner (A) or the matter could be dealt with by the Tribunal itself with the assistance of original authority. In the facts of the case, I hold that this course may not be desirable and I deem it appropriate that the matter must be considered afresh by the original authority himself.
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
ST/540/2010 & ST/CO/40/2010
Arising out of Order-in-Appeal No. 189/10 Dated: 31.5.2010
Passed by the Commissioner of Central Excise (Appeals), Madurai
Date of Decision: 8.2.2011
CCE, TIRUNELVELI
Vs
M/s PEARL SHIPPING AGENCIES
FINAL ORDER NO.293/2011
MISC ORDER NO.60/2011
Per: M Veeraiyan:
Appeal No. ST/540/2010 is by the department against the order of the Commissioner (Appeals) No. 189/10 dated 31.05.2010. The cross-objection No.ST/CO/40/10 is connected to this appeal.
2. Heard the Ld. SDR. None appears for the respondent. There is a letter dated 03.02.11 from the respondents, requesting decision based on the submissions made in cross-objection.
3. The respondents were issued a show cause notice dated 22.11.07, demanding service tax of Rs. 1,96,358/- on the amount received as sub agent’s commission during the period from 01.10.02 to 31.03.06 and proposing imposition of penalties. The respondents filed reply dated 18.01.08, contesting the demand and submitted that the service tax was payable by the main service provider and they relied on Board’s circulars particularly Circular No. 96/7/07-TRU dated 23.08.07. The original authority has confirmed the demand of service tax as proposed in the show cause notice along with interest and imposed penalties under Section 76, 77 & 78 of the Finance Act, 1994. On appeal by the party, the Commissioner (A) set aside the order of the original authority and remanded the matter to the original authority with the following findings and observations:-
“5. The lower authority in para-5 of the impugned order in original has observed that the appellants in their reply to the show cause notice have produced a fax copy of work order given by their main agents in which they have instructed the appellants not to bill service tax. However, the lower authority vide its impugned order has observed in para 7 (findings portion) of the impugned order that the appellants have not produced any evidence to prove that the charges raised by them on the main service provider has been included in the taxable value of the main service provider and the service tax has been paid by the main service provider on such value. The appellants have submitted in this appeal that they intended to submit the required evidence at the time of personal hearing. It is seen from the impugned order-in-original that the same has been passed without affording an opportunity of personal hearing to the appellants.”
4. Ld. SDR submits that subsequent to the amendment to Section 35A (3) of Central Excise Act, w.e.f. 11.05.01, deleting the power of remand, the Commissioner (A) should not have remanded the matter. He also relies on the decision of the Hon’ble Supreme Court in the case of MIL India Ltd. Vs. CCE, Noida reported in 2007 (210) ELT 188 (S.C.), in support of his contention.
5.1 I have carefully considered the submissions of the Ld. SDR and perused the records. It is settled legal position that consequent to amendment of Section 35A (3) w.e.f. 11.05.01, Commissioner (A) has no powers of remand. Therefore, the order of the Commissioner (A) requires to be set aside.
5.2. It is not known as to why the Assistant Commissioner chose not to give a personal hearing which is a clear violation of Principles of Natural Justice. The original authority has shown total disregard for the principles of natural justice in not granting personal hearing before passing the adjudication order. There is no indication that the respondent was delaying the adjudication proceedings as the reply has been promptly submitted by the respondents as has been duly noted by the original authority. He has held that the respondents have not produced any evidence to prove that the charge raised by them on the main service provider has been included on the tenable value of the main service provider. Apparently, the documents could not be produced by the respondents before the original authority. No doubt, that the matter could be directed to be dealt with by the Commissioner (A) or the matter could be dealt with by the Tribunal itself with the assistance of original authority. In the facts of the case, I hold that this course may not be desirable and I deem it appropriate that the matter must be considered afresh by the original authority himself.
6. In view of the above, order of the Commissioner (A) and the order of the original authority are set aside and the matter is remanded to the original authority for fresh consideration after giving reasonable opportunity of hearing to the respondents.
7. The appeal is allowed by way of remand. The cross-objection is also disposed off on the above terms.
(Order pronounced and dictated in the open Court)
