Introduction:
The confirmation of service tax demand can often catch taxpayers off-guard, especially when legal battles stretch across multiple years. A recent decision by CESTAT (reported in 2025 TAXSCAN (CESTAT) 436) offers critical lessons on how remand orders can limit appeal rights and lead to penalty confirmations.
What Happened in This Case?
- The taxpayer had earlier challenged a service tax demand.
- CESTAT had already remanded the matter to the lower authority for limited reconsideration.
- On remand, the Commissioner confirmed the original demand along with penalties.
- When the taxpayer re-appealed, CESTAT dismissed it, citing the scope was already fixed during the earlier remand.
Why Did CESTAT Dismiss the Appeal?
Main reasons cited by CESTAT:
| Reason | Explanation |
|---|---|
| Earlier Remand Order | CESTAT had already limited the issues to be examined. |
| No Fresh Grounds | Taxpayer tried to re-argue broader issues not permitted at remand stage. |
| Binding Nature of Directions | Lower authorities and appellants are bound by CESTAT’s remand directions. |
What Taxpayers Should Learn from This
- Do not delay challenging a restrictive remand order.
- During remand, stick only to the specific directions given.
- Prepare strongly during initial hearings to avoid getting boxed into narrow remand.
Step-by-Step: What to Do If Facing a Service Tax Demand
- Carefully read the original SCN (Show Cause Notice).
- Challenge unfavorable adjudication fully at first appeal stage.
- If remanded, understand the exact scope and stick to it.
- Take legal advice immediately if remand seems restrictive.
- Avoid raising unrelated points during post-remand proceedings.