2018 (12) TMI 871 - AT - Service Tax

SEZ Unit - Refund claim - denial on the ground of time limitation - Section 11B of CEA - Principles of natural justice - Held that - The learned Commissioner has not only violated the principles of natural justice in as much as he has not accorded any opportunity to be heard but also has gone tangentially decide the issue on a set of principles and provisions which are not at all applicable to the facts of the case. The Commissioner (A) is directed to dispose the appeals under relevant provisions of law with reference to N/N. 12/2013 dated 01.07.2013 - appeal allowed by way of remand.

Summary

Issues:
1. Eligibility of SEZ unit for exemption by way of refund under Notification No. 12/2013.
2. Violation of principles of natural justice in passing the order without giving an opportunity to be heard.
3. Consideration of refund claims under incorrect provisions of law.

Analysis:

Issue 1: Eligibility for exemption under Notification No. 12/2013
The appellant, a registered SEZ unit providing ITSS and BAS, sought refund for services received for authorized operations under Notification No. 12/2013. The Original Authority rejected a substantial part of the claim. The appellant contended that Section 51 of SEZ Act overrides other laws, exempting services from Service Tax. The Commissioner (A) remanded the appeals to determine the time limit and nexus between services rendered and received. The Tribunal found the Commissioner's decision flawed, remanding the case for fresh consideration under relevant law within three months.

Issue 2: Violation of principles of natural justice
The appellant argued that the impugned order lacked consideration of facts, legal provisions, and violated natural justice principles. Citing case laws, the appellant contended that the order was passed without a fair hearing. The Tribunal agreed, noting the failure to provide an opportunity to be heard. The case was remanded for reconsideration, emphasizing the importance of natural justice in the process.

Issue 3: Consideration of refund claims under incorrect provisions
The Tribunal observed that the Commissioner considered the refund claims under incorrect provisions, i.e., Rule 5 of CCR and Notification No. 05/2006, instead of the applicable Notification No. 12/2013. The Tribunal directed the Commissioner to reevaluate the appeals under the correct legal framework, ensuring adherence to relevant provisions of law. The case was remanded for proper consideration within a specified timeframe, allowing the appeals and early hearing applications.

This detailed analysis highlights the key issues raised in the judgment, including the eligibility for exemption, violation of natural justice principles, and consideration of refund claims under incorrect provisions. The Tribunal's decision to remand the case for fresh consideration underscores the importance of procedural fairness and adherence to the correct legal framework in such matters.