Order misinterpreting the submissions of the assessee is not tenable.

PJ/Case Laws/2012-13/1483

Case:- Mohendra Construction Vs. C.C.E. Allahabad.

Citation:- 2012(28) S.T.R. 632 (Tri.- Del.)

Brief Facts:-Appellant is registered with the Service Tax department with effect from in or around 2009 for providing service of tangible goods. Said services become taxable with effect from 16-5-2008. As the appellant was providing said services to M/s. Hindalco Industries Ltd., Revenue sought figures of payment to the present appellant from M/s. Hindalco Industries Ltd. as reflected in their books of account. It was found that M/s. Hindalco Industries Ltd. has made a payment of Rs. 1,10,56,813/- to the appellant between the period 1-4-2005 till March, 2010.

As the above receipts from M/s. Hindalco Industries Ltd. were not reflected as value of service by the appellants, proceedings were initiated against them by way of issuance of show cause notice. The same culminated into an order passed by the original adjudicating authority and upheld by Commissioner (Appeals).

Appellant’s contention:-The appellants contention was that the said receipts from M/s. Hindalco Industries Ltd. were either not on account of supply of tangible goods or major portion was for supply of tangible goods prior to 16-5-2008, when the said service was not taxable.

Reasoning of Judgment:-The Tribunal heard both the sides and finds that it is seen from the impugned order of Commissioner (Appeals) as if the appellants have admitted their tax liability. For better appreciation of the impugned order, the Tribunal reproduce the relevant part of the same:

"I find that the appellants have neither contested nor controverted the aforesaid finding. I also find that the appellants in Para 6 of their present Memorandum of Appeal, admitting the above findings, have contended as under -

"6. Appellant has filed reply dated 28-4-2011 duly acknowledged in Service Tax dept. on 5-5-2011, challenging mainly the quantification of demand on the ground that gross payments received includes the amount of Service Tax received from M/s. Hindalco Industries Ltd."

I also find that the appellants in Para 8 of their present appeal, have also admitted that –

"8. It is submitted that in the written submissions filed at the time of hearing before adjudication authority, it was reiterated that Appellant does not want to contest the SCN on the merit.

From the above, it is apparent that the appellants had not contested the merits of the case and accordingly, there is no dispute regarding providing of services and receipt of value of taxable service.

……………
9. In view of aforesaid observations, I find that the adjudicating authority has correctly confirmed the demand of Service Tax. The order-in-original cannot, therefore, be faulted. I, therefore, see no reason to interfere with this order and refuse to allow the appeal. Appeal is rejected."

The Tribunal observed that as can be seen from the above reproduced portion, Commissioner (Appeals) has not dealt with various pleas raised by the appellant and has simply observed that the adjudicating authority has gone through the same and has rightly confirmed the demand, by giving an impression as if the appellant have admitted their duty liability and have not contested the same. On being questioned, learned advocate appearing for the appellant draws our attention to the said paragraphs 6 and 8 of memo of appeal filed before Commissioner (Appeals), reproduced in the impugned order. For better appreciation, we reproduce the same paragraphs from memo of appeal filed before the Commissioner (Appeals).

"6. Appellant has filed reply dated 28-4-2011 duly acknowledged in Service Tax dept. on 5-5-2011 challenging mainly the quantification of demand on the ground that gross payments received includes the amount of Service Tax, received from M/s. Hindalco Industries Ltd., Renukoot, amount pertaining to supply of tangible goods for use service not taxable prior to 16-5- 2008, and threshold exemption.

8. It is submitted that in the written submissions filed at the time of hearing before adjudicating authority, it was reiterated that Appellant does not want to contest the SCN on the merit, as far as it is with regard to deficiency in SCN that it failed to provide classification of services on which demand is raised except regarding the quantification of demand as the gross amount received includes the service tax amount, PF and amount pertaining to services not taxable prior to a particular date."

The Tribunal further finds that comparison of said paragraphs as reproduced in the order and as originally contained in the memo of appeal, it comes out clear that the appellate authority has only reproduced a part of said paragraphs, leaving out the balance lines. As such, the entire colour of the submissions made by the appellant got changed. Reading of para 6 as reproduced above, clearly reflects upon the appellants stand that they are submitting that said amount pertained to supply of tangible goods which was not taxable prior to 16-5-2008. Similarly, para 8 as reproduced above, brings out clearly the appellants stand that they are not contesting the SCN as regards the defence pertained to non-mentioning of the classification of service. For the reasons best known to Commissioner (Appeals), he has chosen to reproduce only a part of the said paragraphs speaking in between and leaving the balance part of the said para to give an impression as if the appellants have accepted their duty liability. Accordingly, he has not discussed the various grounds raised in the order and have simplicitor endorsed the view of the original adjudicating authority.

The Tribunal feel bad about the above style of approach and style of passing of appellate orders, which shakes faith of public in the judicial remedy. Commissioner (Appeals), being the first appellate authority, is expected to go through the facts of the case as also the grounds raised before him, record the submissions made before him and to give his own finding on the same. Disposal of the appeal with distorted reproduction of appellant's submission and mere endorsement of the order of original adjudicating authority CANNOT BE appreciated at all.

Having said so, The Tribunal set aside the impugned order and remand the matter to Commissioner (Appeals) for fresh decision and direct that commissioner (Appeals) will give an opportunity to the appellant of hearing and to deal with their submission in detail.

Decision:-Stay petition as also appeal get disposed of on above terms.

Comment:-The crux of this case is that it is totally against justice to mould the submissions of the assessee to pass an order against him as done by the Commissioner Appeals in the instant case. The submissions made by the appellant are required to be considered as they are intended.

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PJ/Case Laws/2012-13/1483

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