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2014 (7) TMI 663 - HC - Service TaxWaiver of pre-deposit - tribunal directed to make pre-deposit of ₹ 1 crore refusing to grant adjournment - Availment of reduction/abatement of 67% in value of taxable service - Notification Nos. 15/2004-S.T., dated 10-9-2004 and 1/2006-S.T. - payment of service tax at the rate of 2% or 4% on the value of contract under the Works Contract Scheme - Non inclusion of value of material supplied free of cost by the clients - Held that - Request for early hearing cannot bar the petitioner to request for adjournment on genuinely arisen contingencies. Even if the direction is for deposit of 20% of the total amount emphasized by learned counsel for the Revenue, since the petitioner has not been able to put-forth its case of complete waiver and even otherwise also, this order requires interference on the ground of denial of opportunity of hearing as also for violation of principles of natural justice - Matter remanded back - Decided in favour of assessee.
Issues:
Challenge to order of pre-deposit by Central Excise and Service Tax Appellate Tribunal; Denial of adjournment request leading to pre-deposit order; Violation of principles of natural justice in passing the order. The petitioner, engaged in construction activities, challenged a pre-deposit order by the Central Excise and Service Tax Appellate Tribunal. The Tribunal found potential wrongful availment of tax benefits and issued a show cause notice. The petitioner argued that the tax was paid based on a Works Contract Scheme, excluding the value of free materials supplied by clients. The Commissioner confirmed a substantial tax liability, leading to an appeal by the petitioner. The petitioner sought an early hearing due to family emergencies, but the Tribunal rejected an adjournment request and directed a pre-deposit of Rs. 1 crore in addition to the amount already paid. The petitioner contended that the Tribunal's decision lacked a fair hearing and violated natural justice. The respondent argued that the pre-deposit was a small fraction of the total liability and balanced the interests of both parties. The High Court found that the Tribunal's order lacked a proper hearing opportunity for the petitioner. Despite the petitioner's request for early hearing, unforeseen circumstances warranted an adjournment, which the Tribunal should have granted. The Court emphasized that the petitioner's right to a fair hearing should not be compromised, even if seeking an early hearing. The absence of the petitioner's advocate during the Tribunal's decision further highlighted the procedural irregularity. Consequently, the High Court quashed the Tribunal's order and directed a reevaluation. The Tribunal was instructed to provide a fair hearing to both parties before deciding on the pre-deposit application. The petitioner was required to participate in the proceedings, with a specific date set for further hearings. The petition was disposed of without costs, and service to the respondent was permitted.
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