2018 (11) TMI 30 - AT - Service Tax

Area based jurisdiction for grant of Refund - rejection of refund despite lack of jurisdiction - Works Contract service - services provided to the Government, a local authority or a governmental authority - exemption was restored by inserting entry 12A in the Mega Exemption. Held that - The question of jurisdiction raised by the Revenue is not about the basic jurisdiction of the Assistant/Deputy Commissioner to deal with the refund claims. The objection is on area based jurisdiction. If the Revenue was of the view that the refund claims should have been filed with the jurisdictional officer of the Head Office, they were within their rights to transfer the same to the officer having the proper jurisdiction. Adopting an analogy that if an appeal against the orders of the Lower Authorities is to be filed before Delhi Benches of the Tribunal and same stands filed before the Allahabad Benches, the normal and accepted course of action would be to transfer the appeal to Delhi in spite of rejecting the same on the point of jurisdiction. Matter remanded to the Original Adjudication Authority - petition allowed by way of remand.

Summary

Issues:
Request for Adjournment for Appellant(s), Refund claims under Section 102 of the Act, Rejection of refund claims by Deputy/Assistant Commissioner, Appeals before Commissioner (Appeals) challenging rejection, Jurisdictional issues in refund claims processing.

Analysis:
The judgment involves the disposal of four appeals arising from a common impugned order related to the payment of service tax on 'Works Contract service' provided to government departments in Uttar Pradesh. The appellants had paid service tax during a specific period when certain exemptions were omitted and later restored through notifications. Section 102 of the Act, inserted by the Finance Act, 2016, provided for the levy of service tax on specified services to government entities. The appellants sought refunds under Section 102, but their claims were rejected by Deputy/Assistant Commissioners due to lack of supporting documents and failure to prove non-passing of tax incidence.

The appellants, aggrieved by the rejection, appealed before the Commissioner (Appeals) arguing that they had submitted all relevant documents, borne the tax burden, and filed claims with the correct jurisdiction. However, the Commissioner (Appeals) observed discrepancies in the jurisdiction of the refund claims, stating that the Branch Office lacked the authority to file claims without showing taxable service details in their returns. The Commissioner upheld the rejection, leading to further scrutiny.

The judgment highlighted the jurisdictional issues concerning the processing of refund claims. The Appellate Authority cited a High Court decision emphasizing that orders passed without jurisdiction are null and void. Despite acknowledging jurisdictional errors, the Commissioner (Appeals) upheld the rejection of refund claims, prompting the Appellate Tribunal to intervene. The Tribunal concluded that the rejection of claims based on jurisdictional grounds should have led to a transfer of claims to the appropriate authority rather than outright rejection.

In light of the jurisdictional complexities and errors in processing the refund claims, the Tribunal set aside the Commissioner (Appeals) order and remanded the matters to the Original Adjudication Authority. The Tribunal emphasized the need for proper jurisdictional assessment and transfer of claims to the correct authority for further processing. The judgment underscores the importance of adhering to jurisdictional protocols in handling refund claims to ensure fair and lawful adjudication.