2018 (6) TMI 15 - AT - Service Tax

Denial of refund claims - Principles of natural justice denied - non application of mind - Eligibility for exemption by way of refund in respect of services received for authorized operations denied - SEZ unit - N/N. 12/2013 dt. 01/07/2013 - appellant argues that the impugned order has been passed without taking into consideration the facts and the legal provisions applicable to the case of the appellant - Held that - The learned Commissioner (Appeals) has passed the impugned order without application of mind and without properly ascertaining the facts of each case - the impugned order has been passed without affording an opportunity of hearing which is violation of principles of natural justice. If the Commissioner(Appeals) has afforded an opportunity of hearing to the appellant, the appellant would have been able to bring forth all the submissions relating to these cases. But that has not been done - It is surprising that the rectification application filed by the appellant before the Commissioner(Appeals) pointing out the clerical mistakes and the errors in the impugned order were also not considered in accordance with law and has been dismissed summaril In view of these infirmities while passing the impugned order. The appeals of the appellant need to be remanded back to the Commissioner(Appeals) with a direction to examine the refund claims of the appellant with reference to Notification No. 12/2013 dt. 01/07/2013 after following the principles of natural justice by affording an opportunity of hearing to the appellant - appeal allowed by way of remand.

Summary

Issues:
1. Appellant's eligibility for refund under SEZ Act, 2005.
2. Alleged violation of principles of natural justice in passing the impugned order.
3. Discrepancies in the impugned order related to appellant's identity and refund claims.
4. Failure to consider appellant's rectification application.
5. Appropriate legal provisions applicable to the appellant's case.
6. Need for remand and direction for re-examination of refund claims.

Analysis:
1. The appellant, a registered unit under the SEZ Act, 2005, engaged in ITSS and BAS, filed refund applications under Notification No. 12/2013 for services received. The original authority partially granted refunds but rejected a substantial portion. The appellant contended that SEZ Act's Section 51 overrides other laws, exempting services from service tax. The Commissioner (Appeals) remanded the appeals for fresh adjudication, considering the time limit under Section 11B and nexus of services claimed for refund.

2. The appellant argued that the impugned order violated natural justice, citing cases and highlighting the hurried drafting without proper application of mind. The order referred to unrelated matters like export of taxable services, not pertinent to the appellant's case. The appellant's identity was incorrectly stated, and Orders-in-Original not related to the appellant were included. The appellant's rectification application was dismissed without due consideration, further undermining the principles of natural justice.

3. The learned counsel emphasized discrepancies in the impugned order, pointing out errors in the appellant's identity and the refund claims under different notifications. The Commissioner (Appeals) failed to assess the appellant's claims under Notification No. 12/2013, instead applying Rule 5 of CCR and Notification No. 5/2006-CE. The order appeared to mix up cases and lacked specific findings on the appellant's appeals, necessitating a remand for proper examination.

4. The Assistant Commissioner defended the impugned order, leading to a detailed analysis of the submissions from both sides. The Tribunal found that the impugned order lacked proper consideration of facts, violated natural justice, and contained errors regarding the appellant's identity and refund claims. The order's deficiencies warranted setting it aside and remanding all appeals to the Commissioner (Appeals) for reevaluation.

5. The Tribunal highlighted the need for a thorough re-examination of the appellant's refund claims under Notification No. 12/2013, emphasizing adherence to principles of natural justice and affording the appellant a fair hearing. The directive for the Commissioner (Appeals) to dispose of the appeals within three months underscored the importance of a comprehensive review based on relevant legal provisions and the appellant's specific circumstances.