By TIOL News Service

MUMBAI, FEB 19, 2014: THE appellant, a co-operative bank is before the CESTAT against an order passed by the Commissioner(Appeals) upholding a Service tax demand of Rs.7,45,060/-.

The primary submission of the appellant is that the lower appellate authority has not given any reasoning for the conclusion he has drawn except for saying that the appeal does not have much force and the adjudicating authority has given elaborate findings to hold the activity undertaken by the appellant is a taxable service. Inasmuch as it is submitted that in the absence of any reasoning and finding given by the lower appellate authority on the various contentions raised, the impugned order is not sustainable in law and needs to be remanded for consideration afresh.

The Revenue representative, apparently, did not oppose the above submission but reiterated the findings of the lower authorities.

The Bench observed -

5.1 In the impugned order, the lower appellate authority has recorded as follows:

“7. On facts and merits, I find that the appellants have mainly contested the impugned order with regard to quantification of taxable value, though for some amounts they have expressed reservation as to whether the concerned activity merit being called taxable service. I do not find much force in the grounds of appeal put forth by the appellant inasmuch as the amounts on which the demand is based have been reflected in their audited annual Profit & Loss account which statutorily are required to reflect the true state of accounts as on that date. Similarly as regards to the dispute whether a particular activity amounts to provision of service or not, I find that the adjudicating authority has given elaborate findings to rule this to be taxable service.”

5.2 A reading of the above makes it clear that lower appellate authority has not applied his mind at all. While passing an order in appeal, he has to discuss in detail the various contentions raised by the appellant, the legal position and thereafter, come to a conclusion. Merely because the adjudicating authority has given an elaborate finding, it does not mean that the appellate authority need not discuss the matter and give a finding. Such an approach makes a mockery of the appeal proceedings. Therefore, we set aside the impugned order and remand the case back to the appellate authority for fresh consideration and thereafter, pass a speaking order considering the contentions raised by the appellant, acceptability or otherwise of these contentions and then come to a conclusion. The appellant should be given a reasonable opportunity of being heard before passing the denovo order.”

In fine, the appeal was allowed by way of remand.

In passing: NACEN, here I come! Also read Vandana Dyeing P. Ltd. - 2011-TIOL-739-CESTAT-MUM & Sun Pharmaceutical Industries Ltd. - 2013-TIOL-855-CESTAT-AHM.

(See 2014-TIOL-261-CESTAT-MUM)