ST - There is no mention of appellant anywhere in body of SCN and only at beginning, name of appellant figures - although there is no demand from appellant towards any service tax liability, yet ST has been confirmed against them - not sustainable: CESTAT
By TIOL News Service
MUMBAI, JULY 10, 2013: A service tax demand of Rs 14,84,782/- has been confirmed by the Commissioner(Adj), CE, Raigad against the appellant, M/s GFA Anlagenbau GmbH, Germany, for rendering ‘Consulting Engineer's Service' to M/s Ispat Industries Ltd. during the period 1999-2000 along with interest and penalty.
Before the CESTAT the appellant submitted -
+ SCN dated 29/01/2004 was issued to M/s Ispat Industries Ltd. who were asked to show cause as to why the service tax amount of Rs.14,84,782/- on the Consulting Engineer's Service received by them during 1999-2000 from the appellant should not be demanded and recovered and there was no demand in the said notice towards service tax from the appellant at all.
+ Even though a copy of the notice appears to have been endorsed to the appellant, no demand has been made against the appellant, either directly or indirectly.
+ However, the adjudicating authority, while passing the impugned order, dropped the demand against M/s Ispat Industries Ltd. and confirmed the demand against the appellant, only on the ground that the appellant has been named as a noticee in the SCN and the jurisdictional Dy. Commissioner has confirmed that the SCNs were sent to the appellant also at his address.
+ The appellant did not receive any notice for personal hearing but they received the adjudication order through the Consulate General of India in Frankfurt, Germany.
+ Therefore, the entire proceedings are vitiated and the demand is unsustainable in law in the absence of notice to the appellant to show cause.
+ Even on merits the Revenue does not have a case inasmuch as the services were rendered with regard to ‘Erection, Commissioning and Installation Services' which came under the tax net w.e.f 01/07/2003.
The Revenue representative had nothing much to add.
The Bench observed -
"6. We have carefully considered the submission made by both the sides. We have also perused the show cause notice in question. In the show cause notice, the demand for service tax has been made against M/s Ispat Industries Ltd. as the recipient of the services. There is no mention of the appellant anywhere in the body of the show cause notice and only at the beginning, the appellant's name figures. There is no demand from the appellant towards any service tax liability. In other words, there is no valid show cause notice against the appellant towards any service tax demand. Without issue of a notice, no order can be passed against the appellant. It is further noted that the appellant was not heard and personal hearing was granted only to the recipient of the service, M/s Ispat Industries Ltd. and after considering the submissions of M/s Ispat Industries Ltd. the demands were dropped against them and the same was confirmed against the appellant. Inasmuch as the appellant has not been put to notice, the entire proceedings are vitiated and consequently the order passed against the appellant is not sustainable in law. Even on merits, the department does not have any case at all, as the appellant had rendered services to M/s Ispat Industries Ltd. in relation to installation, commissioning and erection. ‘Erection, Installation and Commissioning Service' came into the tax net only w.e.f July, 2003 whereas the impugned demand pertains to the period 1999-2000. On merits also, the impugned order is not sustainable."
The order of the Commissioner was set aside and the appeal was allowed.
Tail piece: Those were the days when SCNs and O-in-Os found their way to the service provider through the Consulate!
(See 2013-TIOL-1043-CESTAT-MUM)
