ORDER
T.K. Jayaraman, Member (T)
1. This appeal has been filed against OIA No. 41/2005 dated 23.02.2005 passed by the Commissioner of Central Excise (Appeals), Mangalore. The appellants hold Service Tax Registration for payment of Service Tax on Security Agency service. After going through the service tax returns filed by the appellant, the departmental officers examined the accounts and documents produced by the appellants. After getting some information from the Customers of the appellant, Revenue came to the conclusion that services provided by the appellant valued at Rs. 1,77,32,197/- escaped assessment. Consequently, proceedings were initiated against the appellant. The contention of the appellant is that the entire amount collected from their customers did not relate to Security Services as the appellants rendered certain other services to their customers and which are not liable to Service Tax. The original authority, after adjudication, demanded an amount of Rs. 5,29,694/-towards Service Tax not paid by the appellants. Interest was also demanded under Section 75 of the Finance Act, 1994. Penalty of Rs. 20,000/- was imposed under Section 76 of the Act. Further, a penalty equal to the Service Tax demanded was imposed under Section 78 of the Act. The appellants were not successful before the Commissioner (Appeals) who confirmed the OIO and passed the impugned order. Hence the appellants have come before this Tribunal for relief.
2. S/Shri T. Rajeswara Sastry and M.S. Nagaraja, the learned Advocates appeared on behalf of the appellants and Shri Ganesh Havanur, the learned SDR for Revenue.
3. The learned Counsel submitted the following points:
(i) The appellant, in addition to providing Security Guards, are engaged in the business of undertaking various Construction works, work contracts such as arranging power supply to temporary sites/shelters, electrical maintenance work in the Rehabilitation Centers set up by the Upper Krishna Project, operation to water supply installations, Street Light control and water supply operations at various centers providing labourers and other staff to the customers, etc.
(ii) The short point in this case is whether the appellant have provided any service to the Rehabilitation Centers of Upper Krishna Projects classifiable under Security Services.
(iii) Our attention was invited to “Work Done Certificate” issued by the Executive Engineer, Upper Krishna Project. Bagalkot, certifying that the Appellant had satisfactorily carried out the entrusted work of pump operations of water supply installations, street light control operations, arranging power supply to temporary sheds and other petty repairs and minor electrical maintenance works etc. for the period from 1998 to 2002 in 69 Rehabilitation Centres under Upper Krishna Project, Bagalkot. There is no indication that Security Services had been rendered to them.
(iv) The Bills submitted by the appellants for the relevant period also indicate the services rendered by the appellant, which do not include any Security Services.
(v) The adjudicating authority obtained a letter dated 14.05.2004 from the Executive Engineer, Bagalkot, in which the authority had indicated that the appellants rendered Security services to them. It was submitted that the appellants were not furnished with the copies of these letters and they had not been given opportunity of rebutting the contents of the letter. Thus, there is gross violation of the Principles of Natural Justice. The learned Advocate relied on the decision of the Tribunal in the case of Nu-Trend Business Machines (P) Ltd. v. CCE, Chennai wherein it was held that the order relying on evidence collected after completion of personal hearing is in violation of Principles of Natural Justice and such order cannot be sustained. It was also held that no evidence could be collected after the personal hearing is completed. Similar decision was taken in the case of Girnar Spinning Ltd. v. CCE, Chandigarh .
(vi) It was urged that an order passed without supplying the document relied on is bad in law. The following decisions were relied on:
(a) Elecon Engg. Co. Ltd. v. CCE, Ahmedabad & Baroda
(b)Turnkey Software Solution v. CC, New Delhi 2004 (175) ELT 638(T)
(vii) The appellants had paid Service Tax in respect of the Security Services rendered by them. Only in respect of the services, which are not liable for Service tax, they had not paid the Service Tax. In these circumstances, the imposition of penalties is not justified.
4. The learned SDR produced a copy of the letter dated 14.05.2004 addressed by the Executive Engineer to the Superintendent, Bagalkot wherein it is stated that the appellants had provided Security Guards for watch and ward of Rehabilitation Centres of Upper Krishna Project. He said the Executive Engineer has confirmed that no amount has been paid for other services. Hence, he requested to confirm the orders of the lower authorities.
5. We have gone through the records of the case carefully. The Adjudicating authority has relied on a letter which was not supplied to the appellants. This is a gross violation of the Principles of Natural Justice as contended by the learned Advocates. All the case-laws cited by them are relevant. We have also perused the ‘Work Done Certificate’. It is not the case of the Revenue that the Work Done Certificate is forged. The Executive Engineer himself, in his letter dated 14.05.2004 stated that other works like switching ON & OFF operations of pumps of water supply installations, switching ON & OFF operations of street-light control points and other petty repairs like replacement of blown off fuse wire etc. along with the watch & ward works were entrusted to the personnel supplied by the appellants. He has also confirmed the issue of Work Done Certificate. The Bills/Pre-receipts issued also indicate the service rendered in the following manner:
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Sl.No. Particulars
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1. Street Light Transformer
Water Supply Motors & Minor
repairs with electrical
equipment, material
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In other words as per the Bills and as per the Work Done Certificate, the amount received from Upper Kannada Project are for the services rendered by the appellant which did not include Security Services. Inasmuch as there is documentary evidence in favour of the appellants, we have to give them the benefit. Revenue has not made a strong case against the appellants. Hence, we set aside the impugned order and allow the appeal with consequential relief, if any.
(Pronounced in open Court on 8 Mar. 2006)