14-Year-Old Service Tax SCN yet to be Adjudicated: CESTAT Quashes Subsequent Statements of Demand [Read Order]
CESTAT relied on one of its earlier judgments to pass an order in favour of the assessee.
![14-Year-Old Service Tax SCN yet to be Adjudicated: CESTAT Quashes Subsequent Statements of Demand [Read Order]](https://images.taxscan.in/h-upload/2025/06/25/2054380-service-tax-scn.webp "14-Year-Old Service Tax SCN yet to be Adjudicated: CESTAT Quashes Subsequent Statements of Demand [Read Order]")
In a recent judgment, the Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) quashed a series of subsequent Service Tax demand notices issued following a service tax show-cause notice (SCN), holding that the Statements of Demand could not stand since the original Show Cause Notice (SCN) dated March 28, 2011 had not been adjudicated.
Kiran Gems, an entity engaged in the manufacture and sale of Cut and Polished Diamond filed three appeals against an Order-in-Original dated March 22, 2016 passed by the Commissioner, Service Tax-IV, Mumbai, which had upheld the subsequent demand notices issued under Section 73(1A) of the Finance Act, 1994 for periods extending up to October 2013.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The dispute began when the revenue department alleged that Kiran Gems had remitted foreign currency to overseas entities and thereby rendered Business Auxiliary and Business Support Services to them. They proceeded to serve four show-cause notices seeking recovery of service tax for the period from 2006-07 to 2012-13 .
The appellants, marking appearance through Shailesh Seth contended that the department had never adjudicated the initial SCN dated March 28, 2011, and that their reply to the first SCN was adopted by them towards the subsequent SCNs as well.
Meanwhile, C.S. Pavan acted as the authorised representative for the Revenue.
Step by Step Guidance for Tax Audit & E-filing, Click Here
Constituting the Bench, S.K. Mohanty, Member (Judicial) and M.M. Parthiban, Member (Technical) examined the record and noted that the later Statements of Demand issued on November 19, 2011, October 12, 2012 and October 28, 2013 were not fit for adjudication in isolation since the first SCN under Section 73(1) remained undecided.
The Tribunal alluded to its own decision in the case of Shairu Gems Diamond Pvt. Ltd. vs. Commissioner of Service Tax-IV, Mumbai (2023 TAXSCAN (CESTAT) 362), where the Tribunal remanded the matter back to the original authority with the direction to consider the first SCN and thereafter to adjudicate the remaining SCNs issued by the department.
On this basis, CESTAT set aside the impugned order of March 22, 2016 while directing the original authority to adjudicate the March 28, 2011 SCN together with the subsequent SCNs of November 19, 2011, October 12, 2012 and October 28, 2013, all after providing Kiran Gems a reasonable opportunity of personal hearing.
Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates
