2017 (5) TMI 624 - AT - Service Tax

Scope of SCN - refund claim - time bar - Held that - in the SCN the Department has not raised any issue of time bar. Further in para 8.1 of the Order-in-Original, the adjudicating authority has categorically held that the refund claim filed in terms of N/N. 17/2011 is well within time. It is evident that the Commissioner(Appeals) has traveled beyond the SCN and also against the findings entered by the adjudicating authority and thereby putting the appellant under surprise by rejecting the refund claim on the ground of being time bar - rejection of refund claim is unjustified - appeal allowed - decided in favor of assessee.

Summary

Issues:
Refund claim rejection based on time limitation under different notifications.

Analysis:
The appeal was filed against the rejection of a refund claim by the appellants, who provided services under the category of Business Auxiliary Service. The refund claim was for service tax paid on specified services wholly consumed for authorized operations of an SEZ unit, amounting to ?20,84,829 for the period October 2010 to June 2011. The claim was made under notification No.17/2011-ST dated 01/03/2011. The original authority rejected the claim after a show-cause notice was issued proposing the rejection. The Commissioner(Appeals) upheld the rejection based on the ground of limitation, stating that the claim should have been filed under Notification No.9/2009 and that the claim under Notification No.17/2011 was time-barred.

The appellant's consultant argued that the issue of time bar was not raised in the show-cause notice, and the adjudicating authority had already determined that the claim was filed within the time limit. The consultant highlighted that Notification No.9/2009 was not in existence at the time of filing the claim and had been superseded by Notification No.17/2011. Therefore, rejecting the claim as time-barred under Notification No.17/2011 was unjustified. The learned consultant requested the Tribunal to allow the refund claim.

The learned AR supported the findings of the impugned order, but the Tribunal, after considering both sides' submissions, held that the rejection of the refund claim was unjustified. It was noted that the Department did not raise the issue of time bar in the show-cause notice, and the adjudicating authority had already determined that the claim was filed within the time limit under Notification No.17/2011. The Tribunal emphasized that the Commissioner(Appeals) had gone beyond the show-cause notice and the adjudicating authority's findings by rejecting the claim on the grounds of being time-barred. Additionally, it was clarified that since Notification No.9/2009 had been superseded by Notification No.17/2011, the only option for the assessee at the relevant time was to file the refund claim under Notification No.17/2011. Consequently, the Tribunal set aside the impugned order rejecting the refund claim and allowed the appeal with consequential reliefs.