2012 (12) TMI 35 - AT - Service Tax

Refund of Service Tax Assessee avail input services which were claimed to have been used for export of Iron Ore fines Part of refund was allowed and reject the balance claim Assessee file an appeal with CIT(A) CIT(A) remand back the issue to original authority for fresh consideration Held that - As CIT(A) remanded the case to the original authority regardless of the legal position that the CIT(A) did not have the power of remand. The original authority had not given a reasonable opportunity to the refund-claimant for adducing evidence and other materials in support of the claim for refund. Therefore, after setting aside the impugned order, we allow this appeal by way of remand with a request to the original authority to reconsider the respondent s claim for refund. Appeal remand back to AO

Summary

Issues:
Claim for refund of service tax, jurisdiction of appellate authority for remand, principles of natural justice violation.

Analysis:
The case involves a claim for refund of service tax amounting to Rs. 1,16,74,658/- on input services used for export of Iron Ore fines. The original authority partially allowed the refund, leading to an appeal to the Commissioner (Appeals). The Commissioner remanded the case to the lower authority due to a lack of opportunity for the party to present evidence. The department's appeal challenges the jurisdiction of the appellate authority for remand, citing legal precedents and Section 85 of the Finance Act, 1994. The Appellate Tribunal agreed with the appellant that the Commissioner (Appeals) did not have the power of remand but acknowledged the lack of opportunity for the refund-claimant to present evidence, violating principles of natural justice.

The Tribunal found the reasons for remand provided by the Commissioner (Appeals) to be valid. The original authority's failure to grant a reasonable opportunity for evidence presentation led to the rejection of the refund claim of Rs. 40,80,901/- being considered a violation of natural justice. Consequently, the Tribunal set aside the impugned order and allowed the appeal by remanding the dispute to the original authority. The original authority is instructed to reconsider the refund claim and make a fresh decision after providing the claimant with a reasonable opportunity to present evidence and be heard.

In conclusion, the Tribunal disposed of the stay application and emphasized the importance of adhering to principles of natural justice in matters of tax refund claims. The judgment highlights the significance of providing parties with a fair opportunity to present their case and the limitations on the appellate authority's power of remand.