Custom, Excise & Service Tax Tribunal
M/S Steel Industrials Kerala Ltd., ... vs Commissioner Of Central Excise, ... on 7 April, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No . 20465, 20466 & 20469 / 2014 Application(s) Involved: ST/Stay/20441 - 20443/2014 in ST/20455 - 20457/2014-DB Appeal(s) Involved: ST/20455 - 20457/2014-DB [Arising out of Order-in-Appeal Nos. 385, 386 & 387/2013 dated 20/12/2013 passed by Commissioner (Appeals), Cochin] M/s Steel Industrials Kerala Ltd., Athani P.O., TRICHUR DIST.-680581 Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax - Calicut CENTRAL REVENUE BUILDING, MANANCHIRA, CALICUT, KOZHIKODE-673001 Respondent(s)
Appearance:
Mr. G. SUBRAMANIAN, ADV C/O. CENTAB, KARIMPATTA RAOD, KOCHI-682016 For the Appellant Mr. S. Teli, A.R. For the Respondent CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER ________________________________________ Date of Hearing: 07/04/2014 Date of Decision: 07/04/2014 Per B.S.V. MURTHY Following submissions were made by the appellant in respect of the three appeals before us.
Service Tax Appeal No. Service Tax (Rs.) Penalty (Rs.) Period involved ST/20455/14 4,60,600/- 4,60,600/- 4/2001 9/2005 ST/20457/14 2,08,080/- 2,08,080/- 10/2005 3/2007 ST/20456/14 2,22,480/- 2,22,480/- 4/2007 3/2007 Total 8,91,160/- 8,91,160/-
These three appeals relate to identical issue. The Assistant Commissioner confirmed the levy of service tax under the category of Management Consultancy Service and imposed penalties. Appeals were preferred before Commissioner (Appeals) who confirmed the demand of service tax under the category Management Consultancy Service and confirmed penalties as above. While the appeals were under consideration by another Commissioner (Appeals) during the hearing the appellant submitted before the Commissioner (Appeals) that the charges in the show-cause notice were merely on presumption and service tax under Management Consultancy Service was not leviable and requested for setting aside and the order passed by the lower authority. After hearing, the Commissioner (Appeals) took a view that the service tax was not leviable under Management Consultancy Service and that the services rendered by the appellant in the field of training, transfer, promotion long term agreement, pay revision of employees, laisoning with Kerala Government, A.Gs Office, handling court/legal matters etc. were rightly classifiable under Business Auxiliary Service and issued a show-cause notice to the appellant. A reply was furnished to the show-cause notice by the appellant stating how Business Auxiliary Service was not applicable as there was no client/principal relationship between the appellant and its subsidiary companies and how the notice was also barred by limitation. After hearing the appellant on two occasions, the Commissioner (Appeals) who had not issued the show cause notice, issued order-in-appeal Nos. 385, 386 & 387 dated 20.12.2013. While passing the orders-in-appeal, the Commissioner (Appeals) has not even made a mention of the show-cause notice issued by his predecessor for re-classification and the replies furnished by the appellant to the notice. He has totally ignored the proposal in the show-cause notice issued for reclassification and passed an order confirming the orders passed by the Assistant Commissioner levying service tax under the category of Management Consultancy Service.
2. We find that the submissions made by the appellants are correct and learned Commissioner (Appeals) should have considered the reply given to the show-cause notice issued by his predecessor. He also should have considered the correctness of classification of the service rendered by the appellant. Further, he also should have considered whether show-cause notice could have been issued or not. When the Commissioner (Appeals) had issued a show-cause notice proposing different classification, rejection of the appeal on the ground that the appellant did not make any pre-deposit is also, in our opinion, not valid. Therefore, the very fact that one of the Commissioners (Appeals) himself felt that the classification should be revised and issued a show-cause notice would show that the issue is debatable. In view of this, the appellant has made out prima facie case for complete waiver of pre-deposit and therefore, we waive the requirement of pre-deposit. However, we find that in this case there is no order on merits and therefore, the matter is required to be remanded. Accordingly, the impugned orders are set aside and the matters are remanded to the Commissioner (Appeals) for fresh decision on merits with a request to ensure that previous show-cause notice issued by the Commissioner (Appeals) is considered and all the submissions that are made by the appellant are considered and a well reasoned order is passed after observing principles of natural justice.
(Operative portion of the order has been pronounced in open court) (S.K. MOHANTY) JUDICIAL MEMBER (B.S.V. MURTHY) TECHNICAL MEMBER /vc/