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Filling up the lacunae in defective SCN not allowed in case of an open remand

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..... Filling up the lacunae in defective SCN not allowed in case of an open remand - By: - Bimal jain - Service Tax - Dated:- 25-6-2015 - - Dear Professional Colleague, Filling up the lacunae in defective SCN not allowed in case of an open remand We are sharing with you an important judgment of the Hon ble High Court of Madras, in the case of Thirumurugan Enterprises Vs. the CESTAT, Shas .....

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..... tri Bhavan Annexe Chennai the Commissioner of Central Excise Pudhucherry Commissionerate [ 2015 (6) TMI 474 - MADRAS HIGH COURT ] on the following issue: Issue: Whether the Tribunal was justified in remanding the matter back to the Assessing Officer which was set aside by the Ld. Commissioner (Appeals) on the ground of Show Cause Notice being defective and vague? Facts: .....

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..... Thirumurugan Enterprises and Others ( the Appellants ) are contractors, who carried out various activities for the Neyveli Lignite Corporation ( NLC ), a Government of India Undertaking. The Department alleged that the activities undertaken by the Appellants are within the purview of Service tax and, therefore, issued Show Cause Notices ( SCN ) to them. Later on, the demand was confirmed by .....

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..... the Adjudicating Authority. Being aggrieved, the matter was taken before the Ld. Commissioner (Appeals), contending that in none of the SCNs, the Department had brought out any allegation against any one of the Appellants with reference to his/her specific/individual activity undertaken for NLC as per the contract or the scope of work, to hold that such activity was a taxable service under the .....

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..... Finance Act, 1994 ( the Finance Act ). Further, none of the SCNs specified the activity with reference to a particular classification of taxable service. In certain cases, consideration received for certain activities which are clearly outside the purview of Service tax levy, were also included in the demand of Service tax, again without any proposal for classification of the service. The Appe .....

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..... llants also pleaded that all demands have been barred by limitation under Section 73 of Finance Act as the Department was in knowledge as early as 2002 about the Appellants' activities. The Ld. Commissioner (Appeals) in the light of various decisions of the Tribunal and the Hon ble Supreme Court, decided the matter in favour of the Appellants accepting their plea both on vagueness of SC .....

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..... N and also on the limitation, therefore setting aside the Adjudication Order. Thereafter, the Department preferred an appeal before the Hon ble Tribunal wherein the matter was remanded back to the Assessing Officer to provide the statement provided by NLC to the Appellants to enable them to defend the demand of tax and thereafter, the Adjudicating Authority was directed to pass Orders after giv .....

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..... ing opportunity of being heard to the Appellants. Being aggrieved, the Appellants preferred an appeal before the Hon ble High Court of Madras contending that there was no proper classification of works in the SCN and hence it suffered from illegality, which cannot be cured and, accordingly, the remand by the Tribunal is virtually an attempt to confirm the Adjudication Order. Held: The Ho .....

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..... n ble High Court of Madras held that the issues raised by the Appellants and answered by the Commissioner (Appeals) in their favour has to be considered by the Tribunal on its own merits and there being no finding on the issues in the manner in which the plea has been taken by the Appellants, who were successful before the Commissioner (Appeals), the Order of the Tribunal cannot be sustained on an .....

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..... issue of open remand. It was further held that the Department cannot be allowed to fill up the lacunae in the SCNs on the basis of an open remand. Accordingly, the Hon ble High Court remanded the matter back to the Tribunal to decide the appeal in relation to the findings of the Ld. Commissioner (Appeals), which was under challenge before the Tribunal. Hope the information will assist you .....

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..... in your Professional endeavours. In case of any query/ information, please do not hesitate to write back to us. Thanks Best Regards, Bimal Jain FCA, FCS, LLB, B.Com (Hons) A2Z TAXCORP LLP Tax and Law Practitioners Delhi: Flat No. 34B, Ground Floor, Pocket 1, Mayur Vihar Phase-1 Delhi 110091 (India) Tel: +91 11 22757595/ 42427056 Chandigarh: .....

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..... H. No. 908, Sector 12-A, Panchkula, Haryana - 134115 Kolkata: Ist Floor, 10 R G Kar Road Shyambazar, Kolkata 700 004 Email: bimaljain@hotmail.com Web: www.a2ztaxcorp.com Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliat .....

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..... es accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon. Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is n .....

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..... ot ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax .....

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