Case Law Details
M. Pandidurai Vs Commissioner of GST & Central Excise (CESTAT Chennai)
Introduction: In the recently concluded case of M. Pandidurai Vs Commissioner of GST & Central Excise, the Chennai branch of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) underscored the significance of the principle of natural justice in legal proceedings. The tribunal ruled that the issuance of a Show Cause Notice (SCN) to an incorrect address and proceeding with an order without intimating the concerned party for a personal hearing was in violation of the natural justice principle.
Analysis: The crux of the dispute revolved around an SCN issued by the Superintendent of Central Excise to M. Pandidurai, demanding service tax payment for ‘cleaning services’ provided to M/s. Ordnance Factory, Tiruchirappalli, from 2007 to 2010. The appellant failed to respond to the SCN, resulting in the confirmation of the demand, including interest and penalties. An appeal to the Commissioner (Appeals) upheld the original decision, leading the appellant to take the matter to the tribunal.
The appellant’s main contention was that the SCN and subsequent adjudication order were sent to an old, incorrect address, thereby violating the principles of natural justice. It was argued that the department knew the appellant no longer resided at the old address but continued to send notices there, despite getting ‘unclaimed’ returns and a note from the owner stating the appellant had vacated two years prior.
Upon review, CESTAT agreed that the appellant was not properly served the SCN nor notified about a personal hearing, leading to an ex parte order. Consequently, the tribunal held that a clear violation of the principles of natural justice had occurred and quashes the demand.
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