2014 (34) STR 35 (Guj) Utkarsh Corporate Services vs. Comm. Ex & ST

Facts:
Appellant provided security services and was registered under service tax. In the matter of three show cause notices, short payment of service tax was demanded and interest and penalty u/s. 76 was imposed. Appellant deposited the service tax and preferred appeal for challenging of penalty. Appellant had raised additional legal grounds in the appeal proceedings. The said authority after referring to provisions of Rule 5 of the Central Excise (Appeal) Rules 2001 did not consider these grounds and rejected the appeal. Thereafter Appellant preferred an appeal before Tribunal raising the same contentions. The Tribunal upheld the decision of the first appellate authority and rejected the Appellant’s appeal without considering the additional grounds. Appellant filed miscellaneous application for rectification of mistake before Tribunal. Tribunal rejected the said application for the reason that there was no mistake committed since appeal was dismissed by Tribunal as there were no apparent reasons to interfere with the order-in-original and order in appeal. Appellant preferred an appeal before the High Court challenging the said rejection by Tribunal.

Held:
High Court observed that:

• Appellant had raised new/additional grounds before the first appellate authority which were legal grounds based on the facts on the records which could be raised before an authority at any stage.

• First Appellate Authority has chosen not to adjudicate on any of these grounds raised before it and instead held that satisfactory reasons have not been provided by the Appellant while raising these grounds.

• First Appellate Authority and Tribunal have erred in not considering the additional grounds legal in nature and therefore there was a need to interfere with the orders passed.

• Setting aside both the orders, the First Appellate Authority was directed to examine all the grounds raised before it.