2017 (11) TMI 1800 - AT - Service Tax

Refund of service tax paid - service tax paid on the said food stuff - N/N. 25/2012, dated 20-6-2012 amended by the N/N. 3/2013, dated 1-3-2013 - scope of SCN - Held hat - In this case, no show cause notice was issued to the respondent and initially deficiency memo was issued to the respondent to produce certain documents in support of their refund claim and it has not been agitated by the Revenue. No show cause notice was issued to allege that the cattle feed is not food stuff. While filing this appeal Revenue has taken a new ground which are not alleged earlier therefore, the Revenue cannot go raise the said issue at this stage to file this appeal - appeal dismissed - decided against Revenue.

Summary

Issues:
Revenue's appeal against the refund claim allowed by the Ld. Commissioner (Appeals) in terms of Notification No. 25/2012, dated 20-6-2012 amended by Notification No. 3/2013, dated 1-3-2013. The key issue is whether the transportation of cattle feed by the respondent qualifies as food stuff under the relevant provisions.

Analysis:
The respondent, engaged in the supply of Milk and Milk Products, availed Cenvat credit of outward transportation service. Following Notification No. 3/2013, dated 1-3-2013, exempting the transportation of food stuff from service tax, the respondent filed a refund claim for the service tax paid on food stuff, including cattle feed. The deficiency memo raised various issues but did not challenge the nature of the items as food stuff. Both lower authorities allowed the refund claim based on the documents provided. The Revenue, however, contended on appeal that cattle feed does not qualify as food under the Food Safety and Standard Act, 2006, thus disputing the refund claim eligibility.

Upon review, it was noted that no show cause notice was issued to the respondent regarding the classification of cattle feed as food stuff. The deficiency memo merely requested documents supporting the refund claim without questioning the nature of the items. The Court found that the Revenue introduced a new ground on appeal, not previously raised, challenging the classification of cattle feed. As such, the Court held that the Revenue cannot raise new issues at this stage of the appeal process, dismissing the appeal for lack of merit.

In conclusion, the appeal by the Revenue was dismissed as the new ground introduced during the appeal process was not part of the original contention, and no prior show cause notice was issued regarding the classification of cattle feed as food stuff. The Court emphasized the importance of adhering to procedural fairness and not introducing new arguments at later stages of the legal process.