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Judgment
Dr. Rachna Gupta, J
The present order is common to two appeals pertaining to the same appellant and order-in-original being common to both the appeals.
The facts relevant for the adjudication are that the Department had proposed a demand of Rs.34,36,948/- along with the proportionate interest and appropriate penalties vide show cause notice no.74/2019-2020 dated 7.1.2020. The demand was based on third party information Form 26-AS from the Income Tax Department. From the said document, the Revenue formed an opinion that the appellants are engaged in providing taxable service but have not discharged their service tax liability towards the amount received as consideration for providing those services. The said proposal initially was dealt with by the Original Adjudicating Authority, who vide Order bearing no.82/2019-20 dated 14.01.2020 has dropped the demand of Rs.6,23,318/- and confirmed the balance amount of Rs.28,10,952/- along with the proportionate interest and the penalties as mentioned in the said order-in-original.
The Department as well as the appellant filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) vide order bearing no.122/2020-21 dated 16.03.2021 has allowed the appeal filed by the Department holding that the Adjudicating Authority has erred in dropping the demand of Rs.6,23,318/-. The said demand has also been confirmed thereby modifying the order-in-original to the said extent. With respect to the appeal filed by the appellant, the order-in-appeal bearing no.531/2021-22 dated 28.10.2022 was passed allowing the appellant’s appeal by way of remand directing the Original Authority for fresh adjudication after compliance of the principles of natural justice on the matter relating to service tax demand of Rs.6,91,111/-. Being aggrieved of both these orders-in-appeal, the appellant is before this Tribunal.
Learned counsel for the appellant while impressing upon the findings in para 7.1 of the order-in-appeal dated 28.10.2022has mentioned that since it has already been appreciated that the opportunity of producing relevant documents was not given to the appellant, the matter is prayed to be remanded for de novo consideration vis-à-vis the entire demand, as was proposed in the impugned show cause notice. Both the appeals are accordingly prayed to be allowed by way of remand.
While rebutting these submissions, learned Authorised Departmental Representative has mentioned that the order-in-appeal dated 16.03.2021, as has been passed with respect to the appeal, which was filed by the Department, has confirmed that part of the demand also, which was dropped by the Original Adjudicating Authority. In view thereof, in fact there remains no necessity of matter being re-heard and no necessity of compliance of the directions in the another order-in-appeal. Hence, the request of remanding both the appeals for fresh adjudication is not reasonable. The demand, as was proposed, has already been fully confirmed. Appeals are, therefore, prayed to be dismissed.
Having heard both the parties, we observe that both these appeals have assailed two different orders-in-appeal, however, both of them are arising out of the same order-in-original, where part of the demand (Rs.6,23,318/-) proposed was dropped by the Original Authority and the remaining demand was confirmed (Rs.28,10,952/-). The appellant was before the Commissioner (Appeals) being aggrieved of the confirmation of the demand of Rs.28,10,952/-and the Department was before the Commissioner (Appeals) being aggrieved of dropping of the demand of Rs.Rs.6,23,318/-.
It is observed that pursuant to the Department’s appeal vide order dated 16.03.2021, the appeal of the Department has been allowed with certain modifications but the fact remains that dropping of demand has been held to be an error on the part of the Original Adjudicating Authority. From the Order-in-Appeal, as has been passed pursuant to the appellant’s appeal before the Commissioner (Appeals), we observe that the directions of the de novo adjudication vis-à-vis the amount of tax dropped has been given. We also observe that the said order is dated 28.10.2022 i.e. subsequent to the order dated 16.03.2021 as was passed in the Department’s appeal. The order of remand being later in time and being a judicial order has to be complied with mandatorily. Also keeping in view the doctrine of merger of the orders and fact that part of the demand is still under consideration that too, as observed from para 7.1 of the order dated 28.10.2022, on the ground that the Original Authority did not give ample opportunity to the appellant for submission of the bank statements/other documents in support of their claim and confirmed the service tax demand against the differential receipts in the absence of the documents. The Adjudicating Authority is, therefore, held to be unjustified in confirming the said tax demand.
In view of these observations, we hold that the principles of natural justice have not been properly followed in the present case. Absence of opportunities to produce the documents affects the adjudication vis-à-vis the entire demand. Resultantly, we deem it appropriate that it is not only the amount of demand dropped but the balance amount of the demand, which has been confirmed, require re-consideration in the light of the documents, yet to be brought on record.
Hence, we deem both the appeals to be a fit case to be remanded back for de novo adjudication. We order accordingly. The Original Adjudicating Authority shall be providing time to the appellant to provide all necessary documents and to be heard properly. Thereafter, a fresh order shall be passed with respect to entire demand proposed in the impugned show cause notice, preferably within a period of 4 months from the date of receipt of the present order. With these observations, both these appeals are hereby allowed by way of remand.
[Order dictated & pronounced in open court]