M/S Ahlcons INDIA Private Limited vs. Principal Commissioner, CGST, Delhi South Commissionerate & Anr.

Facts

The Petitioner, M/s Ahlcons India Private Limited, filed a writ petition challenging an Order-in-Original dated March 30, 2025, passed by the Principal Commissioner, CGST, Delhi South. The Petitioner is engaged in works contract services. Four Show Cause Notices (SCNs) were issued concerning service tax demands for periods ranging from 2006-07 to 2013-14, with total proposed demands exceeding Rs. 24 crore. The Customs Excise and Service Tax Appellate Tribunal (CESTAT) had previously remanded these matters. The Petitioner argued that the impugned order confirmed demands that were originally dropped in earlier Orders-in-Original and not challenged by the revenue. The Petitioner also contended that there was a significant delay by the Original Authority in passing the impugned order after remand.

Held

The Court held that it was clear from a perusal of all the orders that the originally dropped demands were not under challenge before CESTAT. Therefore, on remand, prima facie, these demands could not have been re-opened. The Court found a prima facie case made out by the Petitioner that the dropped demands could not have been confirmed as there was no fresh adjudication directed by CESTAT for these dropped demands. The question of whether the liability existed against the Petitioner or not would have to be adjudicated by CESTAT. The Court permitted the Petitioner to avail of its appellate remedy before CESTAT, subject to certain conditions regarding pre-deposit. Specifically, no pre-deposit would be liable for the dropped demand, and the CESTAT would consider the validity of re-confirming dropped demands. The Petitioner was also granted adjustment for pre-deposit already made and directed to make the remaining pre-deposit within three months for the appeal to be adjudicated on merits.

Key Issues

1. Whether the Original Authority, after remand by CESTAT, could re-confirm demands that were originally dropped in earlier Orders-in-Original and were not challenged by the revenue before CESTAT? 2. Whether the impugned order dated March 30, 2025, is sustainable in law, considering that it allegedly re-confirmed demands that were dropped in previous adjudication orders? Petitioner's Arguments: - The Petitioner contended that the Original Authority exceeded its jurisdiction by re-confirming demands that were dropped in earlier Orders-in-Original and were not subject to challenge by the revenue before CESTAT. The adjudication upon remand should have been limited to the issues raised by the Petitioner before CESTAT. - The Petitioner also argued that there was a substantial delay of six to seven years by the Original Authority in passing the impugned order after the remand by CESTAT. Revenue's Arguments: - The learned Standing Counsel for the Respondent sought instructions in the matter, but it was noted that even dropped demands appeared to have been confirmed in the impugned order.