2017 (7) TMI 245 - AT - Service Tax

Refund claim - Reverse charge - services procured from overseas providers - Held that - There was no appeal by Revenue against the implied findings of eligibility for sanction of refund. In the light of approval of the claim by the original authority, it is inconceivable that the first appellate authority had sufficient material to determine ineligibility for refund at the threshold. The impugned order has not examined the merit of the claim either. It would, therefore, appear that the first appellate authority has travelled beyond jurisdiction to reject the claim for refund. As the fundamental issue of limitation and eligibility have not been considered by the original authority, the matter needs to be remanded - appeal allowed by way of remand.

Issues:
1. Rejection of refund claim by the original authority.
2. Barred by limitation of time.
3. Scope of appeal and procedural requirements.
4. Examination of the merits of the claim and issue of limitation.
5. Jurisdiction of the first appellate authority.
6. Consideration of limitation and eligibility by the original authority.

Analysis:

1. The appellant, M/s Mazgon Docks Ltd, appealed against the rejection of their refund claim amounting to &8377; 69,21,00,612 by the Commissioner of Central Excise (Appeals), Mumbai-I. The claim was related to services procured from overseas providers, and the issue arose due to the excess payment of service tax for the period from 5th January 2006 to 4th January 2008. The original authority rejected the claim for failure to evidence that the tax incidence had not been passed on to the customer, the Indian Navy.

2. The impugned order upheld the rejection of the claim on the grounds of being time-barred. The appellant argued extensively on both merit and procedural requirements, emphasizing that the claim was complete except for the lack of evidence regarding the tax incidence. The original authority's conclusion on this aspect was considered crucial before delving into the merits of the claim and the issue of limitation.

3. The Tribunal noted that the first appellate authority had exceeded the scope of the appeal and the show cause notice by delving into issues beyond the alleged lacuna in the refund claim. The original authority's focus on the lack of evidence regarding the tax incidence implied that the claim was otherwise eligible for sanction. The Tribunal found that the first appellate authority's rejection of the claim based on jurisdictional grounds was contrary to the law on refunds.

4. Since the original authority did not adequately consider the fundamental issues of limitation and eligibility before rejecting the claim, the Tribunal deemed it necessary to remit the matter back to the original authority for a fresh consideration within the framework of the show cause notice. The Tribunal concluded that the claim should be restored for a proper examination of the issues at hand, emphasizing the importance of following the statutory provisions under the Central Excise Act, 1944.

5. In light of the above analysis, the Tribunal set aside the impugned order and directed the original authority to reevaluate the refund claim of M/s Mazgon Docks Ltd in accordance with the statutory provisions and the principles governing the eligibility for refunds, ensuring a fair and thorough examination of the claim within the prescribed legal framework.

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