2011 (9) TMI 121 - AT - Service Tax

Refund - Payment of service tax earlier under wrong classification - Change in the classification - from Online Information and Database Access or Retrieval services to Business Auxiliary service - Notification No.14/04-ST dated 10/09/2004. - Principle of natural justice - Held that - while passing the the principles of natural justice has been violated. - matter remanded back for passing fresh order on merit.

Summary

Issues involved: Appeal against impugned order and stay application; Service tax liability under different categories; Refund claim rejection; Violation of principles of natural justice in review proceedings.

Analysis:

1. Service Tax Liability: The appellants initially paid service tax under Online Information and Database Access or Retrieval services but later realized their activities fell under Business Auxiliary Service. They filed a refund claim under Notification No.14/04-ST dated 10/09/2004, stating they were not liable to pay service tax at all.

2. Refund Claim and Review Proceedings: The Assistant Commissioner issued a show-cause notice on the refund claim, which was adjudicated in favor of the appellants, and the refund was sanctioned. However, the Commissioner reviewed the adjudication order and issued a notice for review proceedings. The appellants claimed they did not receive the notice in time and the order was passed ex-parte, alleging a violation of principles of natural justice.

3. Violation of Natural Justice: The appellants contended that they were not given an opportunity to contest their case before the Commissioner during the review proceedings. The Tribunal agreed that the principles of natural justice were violated, as the appellants were not afforded a reasonable opportunity to present their case. Consequently, the impugned order was set aside, and the matter was remanded back to the revisionary authority for fresh hearing.

4. Final Disposal: The Tribunal, after waiving the pre-deposit, disposed of the appeal and stay application by remanding the matter for fresh hearing to ensure the appellants are given a fair opportunity to present their case before the revisionary authority.

In conclusion, the Tribunal found merit in the appellants' argument regarding the violation of natural justice and ordered a fresh hearing to be conducted by the revisionary authority to pass a new order on the merits of the case.