The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand as there was non-reliance on documentary evidence in Show Cause Notice and observed that it amounts to serious violation of natural justice principles
The appellant, M/s. R.S. Constructions, is engaged in civil construction work and had obtained Service Tax registration. It appeared in an audit of accounts of the appellant wherein it was noticed that the appellant had not paid the Service Tax on the value of taxable services realized by them for the period from July 2008 to December 2008. Further, it was also noticed that the appellant had not paid the Service Tax on Site Formation Service, Cargo Handling Service and Commercial or Industrial Construction Service provided to various clients.
S. Durairaj, Advocate appeared for the appellant and M. Ambe, Deputy Commissioner appeared for the Revenue
The Advocate for the appellant submitted at the outset that the Show Cause Notice is ex facie illegal since the issuing authority has not relied upon any evidence to propose the various demands against the appellant and that the Show Cause Notice is contrary to the C.B.E.C. Master Circular No. 1053/2/2017-CX. dated 10.03.2017.
The Counsel seriously contended that the authority has also not mentioned in the Show Cause Notice the relied upon documents, whereby the appellant was deprived of proper defence and further contended that though the appellant had filed documents the Commissioner called for a verification report and proceeded to conclude the adjudication proceedings based on such report obtained.
The Deputy Commissioner for the Revenue relied on the findings in the impugned Order in-Original.
The Coram consisting of P Dinesha, Judicial Member and M Ajit Kumar, Technical Member observed that “It is clear to us that even on merits, the demands proposed in the Show Cause Notice, which thereafter have been confirmed in the impugned Order-in-Original, are without any basis or without any documentary evidence and that there is serious violation to the principles of natural justice and hence, no part of the demand can be sustained.”
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