No Actual Service of Notice of Hearing by Commissioner ( Appeals ): CESTAT quashes Service Tax Demand [Read Order]

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed service tax demand as there was no actual service of notice of hearing by Commissioner ( Appeals ).

It was found that the appellant has been conducting various tests for immigration seekers and the services thus provided by the appellant was not a part of Healthcare Services as such checkups conducted by the appellant are not for the purpose of identifying/diagnosing the disease for treatment.

The investigation was initiated and statement of Dr. Ashwani Kansal, partner of the appellant firm was recorded on 31.10.2018 & 19.02.2019. It appeared to the department that the appellant has evaded service tax on medical Check-ups for immigration service and the appellant is not entitled for the benefit of exemption from service tax in terms of serial no. 2 of Notification No. 25/2012- Service Tax dated 20.06.2012 which provides exemption to Health Care Services by a clinical establishment, an authorized medical practitioner or paramedics.

The appellant filed reply to the show cause notice. After following the due process, adjudicating authority vide its Order-in-Original, dropped the proceedings initiated against the appellant vide show cause notice, on various grounds as stated in the Order-in-original. Aggrieved by the said order, the department preferred the appeal before the Commissioner ( Appeals ) who vide the impugned order has set aside the Order-in-Original, passed by the Adjudicating authority in favour of the appellant. Hence, the present appeal.

The Counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law and that the impugned order has been passed by violating the principles of natural justice because the appellant did not receive the copy of the appeal filed by the department and also the notice of personal hearing as fixed for 07.12.2022, 01.02.2023 and 14.02.2023 and the appellant could not file the cross objections against the appeal filed by the Department.

Quashing the service tax demand a Two-Member Bench of SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “The department has also not been able to establish the actual service of notice of hearing by Commissioner ( Appeals ). Since, the order was passed without affording an opportunity of hearing to the appellant in spite of the fact that Original Authority has allowed the claim of the appellant. In view of these facts, we are of the considered opinion that this case needs to be remanded back to the Commissioner ( Appeals ) with a direction to decide the matter afresh on merits after giving proper and adequate opportunity of hearing to the appellant.”

To Read the full text of the Order CLICK HERE

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