By TIOL News Service

KOLKATA, MAY 14, 2014: AGAINST an order passed by the CCE, Patna confirming a Service Tax demand of Rs.12.56 crores and equal penalty etc., the appellant is before the CESTAT.

The appellant submits that the Department has issued two SCNs on 30/04/2010 and the other on 15/04/2011 involving the same issue for the same period. That whereas in the first SCN there is a demand of Rs.2.29 crores, the second demand raises a demand of Rs.12.56 crores; that even though the Department has referred to ST-3 Returns of third parties in the SCN dt.15/04/2011, the same were not supplied to them in spite of the request made in November, 2011; that no time frame was set out to reply to the SCN dt. 15/04/2011. However, it is submitted that they have neither responded/replied to the earlier SCN dated 30/04/2010. It is further submitted that even though they sought time during the course of personal hearing, the same was not granted to them and the order was passed ex parte in gross violation of principle of natural justice; that as directed by the Tribunal, they procured all work-orders and other documentary evidences, in support of their case which is around in 19 bundles consisting of 2698 sheets.

It is finally submitted that the demand is highly inflated and in any case, the demand of Rs.12.56 crores cannot be sustained against them; assuming without admitting, approximately the service tax payable by them may come around Rs.30.00 Lakhs and they offer to deposit Rs.25.00 Lakhs and prayed that the case may be remanded.

The Revenue representative submitted that the first SCN was issued to the applicant on the basis of documents that were available to the Department. In the said SCN, it has been specifically recorded that in spite of several reminders and summons to the noticee, they did not produce the complete data resulting into non-incorporation of entire service tax liability of the applicant in the demand notice. That subsequently, on receiving the relevant data, the department issued the SCN on 15.04.2011 whereby, the correct service tax liability which ought to have been paid by the applicant had been demanded. And that it was because of non-cooperative attitude of the applicant that two SCNs were required to be issued to the applicant; that the request for the documents by appellant was made after the conclusion of personal hearing. However, the A.R. had no objection for remanding the case for reconsideration but pleads that the applicant be put into terms as it is because of applicant's dilatory attitude the Notices could not be properly adjudicated.

The Bench inter alia observed -

+ Prima facie , it cannot be lost sight of the fact that the appellant had not been serious from the date of issuance of the first SCN i.e. on 30th April, 2010 in responding to the allegations of the Department about short payment of service tax.

+ During the course of hearing, before this forum, the Advocate has placed around 19 bundles of documents comprising of contracts/invoices etc. running into around 2600 pages which they failed to produce before the adjudicating authority.

+ Both sides, at this stage, agree that the matter be remanded to the adjudicating authority for consideration of the evidences which were not earlier placed before the adjudicating authority.

Agreeing with the AR that while remanding the case, the appellant be put to terms, the Bench directed the appellant to make a pre-deposit of Rs.25.00 Lakhs and report compliance directly to the Commissioner who would complete the adjudication within four months.

The appeal was allowed by way of remand.

(See 2014-TIOL-763-CESTAT-KOL)