Adjudicating authorities must confine de novo proceedings to the scope of remand directions.

The appellant, a society registered under the Societies Registration Act, 1860, provided services relating to the automobile industry, including Business Exhibition Service.

In an earlier appeal, the Tribunal set aside the demand concerning Club or Association Service and remanded the Business Exhibition Service demand for verification of differences between the revenue-sharing figures certified by the Confederation of Indian Industry (CII) and receipts recorded in the appellant’s balance sheets, including the appellant’s claim that it had received government grants.

On remand, the adjudicating authority dropped demands under earlier notices but confirmed Rs. 22,20,086, with interest and penalties, for the period covered by the notice dated 26 October 2012, relying on a discrepancy between the balance sheet and the appellant’s Chartered Accountant’s certificate.

The appellant appealed, arguing that the authority exceeded the remand’s scope and that CII had already paid service tax on the exhibition-related amounts.

Whether the adjudicating authority exceeded the scope of the Tribunal’s remand by confirming the demand without properly addressing the specified reconciliation and the appellant’s supporting material.

Whether the demand could be sustained on the balance-sheet figures despite the CII certificate, the Chartered Accountant’s certificate, and the appellant’s contention that CII had discharged service tax on the relevant amounts.

An authority conducting a de novo adjudication must comply with the terms of the remand and the directions of the appellate forum; failure to do so breaches judicial discipline.

The Tribunal relied on Akasaka Electronics Ltd. for the principle that books of account, balance sheets, and Chartered Accountant’s certificates are admissible evidence of their contents.

It also relied on P.K. Vijayan v. T.A. Jayaprabha in support of the requirement to observe judicial discipline, and Synergy Audio Visual Workshop P. Ltd. v. Commissioner of Service Tax, Bangalore in support of its conclusion that balance-sheet figures alone, without supporting evidence, were insufficient in the circumstances.

The prior remand order had further directed verification of the difference between CII-certified revenue sharing and the appellant’s recorded receipts, while taking account of the claimed government grants; it observed that the same amount could not be taxed twice if CII had discharged the service tax liability.

The Tribunal read the remand as requiring verification of the identified differences and consideration of the appellant’s explanation and supporting material, rather than confirmation of the demand solely by reference to balance-sheet figures.

It held that the adjudicating authority had not adequately addressed the Chartered Accountant’s certificate or the appellant’s submission that CII’s income certificate reflected accrual-based accounting while tax was paid on amounts actually received; nor had it addressed the prior finding that amounts on which CII had paid tax could not be taxed again.

The certificate and accounting records were admissible evidence, and the authority’s reliance on the balance sheet alone did not justify the demand in the circumstances.

The Tribunal therefore concluded that the adjudicating authority had failed to follow the remand directions and had travelled beyond their scope.

It set aside the order under appeal and allowed the appeal.