M/S Surya Cef Jv vs. The Chief Commissioner, CGST And Central Excise

Held

The Court allowed the writ application on the ground of violation of principles of natural justice. It was held that the adjudicating authority (Respondent No. 3) failed to comply with the statutory requirement of granting at least three opportunities for personal hearing, as envisaged under Section 33A of the Central Excise Act, 1944, read with paragraph 14.3 of the master circular. The Court noted that while a hearing was held on 14.02.2024, no specific date was fixed for a further hearing, and the petitioner was asked to provide substantiating documents, which they had not done within 15 days. The Court found that the adjudicating authority had not followed the mandate of the circular and the spirit of Section 33A. Consequently, the impugned order was set aside. The matter was remitted to the Respondent No. 3 for fixing a fresh date of hearing, allowing the petitioner at least four weeks to produce documents and submit written submissions. The Respondent No. 3 was directed to pass a fresh reasoned order within two months from the date of receipt of the order. The Court expressly stated that other issues raised by the petitioner were not adjudicated upon as the writ application was allowed on the first ground.

Facts

The petitioner, M/s Surya CEF JV, filed a writ application challenging an order dated 29.02.2024 passed by the Commissioner, Central Goods and Services and Central Excise (Audit), Patna. This order confirmed a demand of Service Tax amounting to Rs. 3,54,59,160/-, along with interest under Section 75 and penalties under Sections 77 and 78 of the Finance Act, 1994. The petitioner was engaged in projects for designing, constructing, supplying, testing, and commissioning pipe water supply schemes on a turnkey basis. The show cause notice was issued on 13.10.2021. The petitioner sought to quash the demand, arguing it violated principles of natural justice by not being granted a third opportunity for personal hearing, and that the services were exempted under the Mega Exemption Notification No. 25/2012-ST.

Key Issues

1. Whether the impugned order demanding Service Tax, interest, and penalty is violative of the principles of natural justice due to the denial of a third opportunity for personal hearing, as stipulated by Section 83 of the Finance Act, 1994 read with Section 33A of the Central Excise Act, 1944 and C.B.E.&C. Circular No. 1053/02/2017-CX? 2. Whether the income received by the petitioner from the design, construction, supply, testing, and commissioning of pipe water supply schemes on a turnkey basis is exempted from Service Tax under Serial No. 12(e) of the Mega Exemption Notification No. 25/2012-ST dated 20.06.2012? Petitioner's Arguments: - The petitioner contended that the adjudicating authority failed to provide a third opportunity for personal hearing, thereby violating principles of natural justice. They relied on Section 33A of the Central Excise Act, 1944 and C.B.E.&C. Circular No. 1053/02/2017-CX, which mandate at least three opportunities for personal hearing. - The petitioner argued that their services, related to water supply schemes, fall under the 'Mega Exemption Notification' and are therefore not exigible to Service Tax. Revenue's Arguments: - The judgment does not record specific arguments made by the revenue on the issues raised by the petitioner.