Case Law Details
CST Vs. Maa Communications Bozell Ltd. (Karnataka High Court), CEA No. 7 of 2007, Dated- June 3, 2010
Brief of the Case- The approach of the Tribunal in this particular case has been very cursory. In fact, in a matter the like this, if the facts are involved pertaining to suppression of material and second show cause notice has been issued, the entire factual matrix had to be considered in order to give a finding with regard to validity of the second show cause notice issued by the Assistant Commissioner. In the absence of there being any application of mind on this issue, the Tribunal could not have allowed the appeal of the assessee by merely relying on the Apex Court’s decision. The Tribunal could not have passed such an order by merely referring to a precedent and dispose of the matter without laying any foundation for the same in the form of narrating the facts and giving reasons and only by relying on the basis of the facts narrated and the contentions urged by the counsel.
Facts of the Case- The facts leading to filing of this appeal are that initially, a show-cause notice dated 4-7-2001 was issued by the Assistant-Commissioner of Central Excise to the respondent-assessee which was adjudicated upon and an order came to be passed on 6-5-2002, by which the demand made in the show cause notice for a sum of Rs.5,43,092/was confirmed with regard to the service tax for the period October 1998 to March 2001 and interest of Rs.2,26,689/-was also confirmed by virtue of section 75 of the Finance Act (for short ‘the Act) 1994 and for the delayed payment of service tax. However, imposition of penalty under sections 76-77 of the said Act was dropped. Subsequently, another show cause notice was issued on 3-4-2003 by the Assistant Commissioner of Central Excise, Bangalore, on the ground that there had been suppression of value of taxable service with an intention to escape payment of Service Tax amounting to Rs.34,78,209/- and in respect of the total taxable service rendered and therefore, it was stated that the assessee was liable for penal action under sections 75, 76 and 78 of the said Act. In the said show cause notice, demand was made for payment of service tax amounting to Rs.34,78,209/- as well as questioning as to why interest and penalty should not be imposed for the failure of payment of service tax. In response to the said show cause notice, a reply was given by the respondent- assessee and thereafter the said notice was also adjudicated upon and an Order-in-Original dated 14-11-2005 came to be passed by the Commissioner of Central Excise, by which the demand made was confirmed under section 73 of the Act and it was also directed that interest to be paid under section 75 of the Act and as well as penalty under Section 76 of the Act. Being aggrieved by the said order, the respondent herein preferred an appeal before the CESTAT (for short ‘the Tribunal’). The Tribunal by its order dated 26-6-2006 allowed the appeal of the respondent- assessee by placing reliance on a decision of the Apex Court in the case of NIZAM SUGAR FACTORY -vs-CCE reported in 2008 (197) ETL 465 (SC). The said order of the Tribunal is challenged in this appeal by the Revenue.
Held by Karnataka High Court
In fact, it is only in a reasoned order that the application of mind of a judicial or a quasi judicial authority would become apparent.
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