KUMAR ASSOCIATES Vs. CCE (ST)

JUDGEMENT

(1.) AFTER examining the records and hearing both sides, I find that the appeal itself requires to be finally disposed of at this stage. Accordingly, after dispensing with predeposit, I take up the appeal.

(2.) THE original authority had, purportedly in adjudication of a show -cause notice dated 14.2.2005, passed an order confirming demand of service tax of Rs. 1,08,332/ - against the appellants for the period July 2003 to May 2004 under the proviso to Section 73(1)(a) of the Finance Act, 1994, demanding interest on the service tax amount under Section 75 of the Act and imposing penalties on the party under various other provisions of the Act. Against this decision, the party preferred an appeal to the Commissioner (Appeals), wherein their main grievance was that the lower authority had passed the above order without serving show -cause notice on them or giving them any opportunity of being heard. They prayed to the appellate authority for remand of the case to the lower authority. Learned Commissioner (Appeals), however, directed them to predeposit an amount of Rs. 50,000/ - under Section 35F of the Central Excise Act r/w Section 83 of the Finance Act, 1994 after observing thus: Thus the non -receipt of show -cause notice or personal hearing information does not alter prima facie case found by the Department. When no deposit was found, the Commissioner (Appeals) passed the impugned order dismissing the assessees appeal for non -compliance with Section 35F of the Central Excise Act without examining the merits of the case. The present appeal is directed against the appellate Commissioner's decision.

(3.) AFTER hearing both sides and considering their submissions, I observe that the plea of non -receipt of show -cause notice, raised by the party, was virtually accepted by the lower appellate authority. It was also virtually conceded that any opportunity of being heard had not been granted to the appellants by the original authority. In the circumstances, the only option available to the appellate authority was to remand the case to the lower authority for de novo adjudication in accordance with law and the principles of natural justice. Instead, the appellate authority chose to embark or an enquiry into prima facie case and to direct the party to make predeposit. This action was unwarranted.