2010 (10) TMI 781 - AT - Service Tax

SCN - appellate authority cannot go beyond the allegations raised in the show-cause notice a new case cannot be made out in an appeal stage order is liable to be set aside and remanded back to the ld. Commissioner (Appeals) order set aside and the matter is remanded back to the ld. Commissioner (Appeals) to reconsider the issue after following the principles of natural justice to decide the issue within the allegations made in the show-cause notice and findings recorded by the Adjudicating Authority and the grounds of appeal. The appeal is allowed by way of remand.

Summary

Issues:
Refund application for service tax paid by distributor of prepaid SIM cards of BSNL; Allegations exceeding show-cause notice in appellate authority's findings; Requirement of agreement between distributor and BSNL.

Analysis:
The appeal was filed against the Order-in-Appeal rejecting a refund application for service tax paid by the appellant as distributors of prepaid SIM cards of BSNL. The appellant contended that they were not liable to pay service tax as it had already been paid by BSNL. The Adjudicating Authority rejected the refund application after issuing a show-cause notice, which was further upheld by the ld. Commissioner (Appeals). The appellant argued that the findings of the first appellate authority went beyond the allegations raised in the show-cause notice and the findings of the Adjudicating Authority, essentially presenting a new case. On the other hand, the Departmental Representative (DR) argued that the appellant should have provided a copy of the agreement with BSNL for a proper decision by the Commissioner (Appeals).

Upon reviewing the submissions and records, the Judge found that the ld. Commissioner (Appeals) had indeed exceeded the scope of the allegations in the show-cause notice and the findings of the Adjudicating Authority. It was emphasized that an appellate authority cannot introduce a new case at the appeal stage. Consequently, the impugned order was set aside, and the matter was remanded back to the ld. Commissioner (Appeals) for reconsideration. The Judge directed the Commissioner to decide the issue within the boundaries of the allegations in the show-cause notice, the Adjudicating Authority's findings, and the grounds of appeal presented by the appellant. The appeal was allowed by way of remand, emphasizing the importance of adhering to the principles of natural justice in the reconsideration process.