2019 (6) TMI 570 - AT - Service Tax

Refund of CENVAT Credit - excess utilization of Cenvat credit - principles of natural justice - HELD THAT - Commissioner (Appeals) has afforded opportunity to the appellant to appear on 31.01.2018, 15.02.2018, 05.03.2018 and 19.03.2018 but the appellant did not appear on any of the dates and also did not seek adjournment. Since the appellant has proved that he has made request for adjournment and the Commissioner (Appeals) has wrongly observed that the appellant did not seek any adjournment. Further the impugned order passed in the absence of the appellant is violative of the principles of natural justice as the said order has been passed in the absence of the appellant. This case needs to be remanded to the Commissioner (Appeals) to decide the same on merit after affording an opportunity of hearing to the appellant - appeal allowed by way of remand.

Summary

Issues:
Refund claim rejection based on lack of opportunity for hearing and violation of principles of natural justice.

Analysis:
The appeal was against an order rejecting a refund claim of the appellant, engaged in various services related to a Cinema theatre. The claim was for excess utilization of Cenvat credit. The Assistant Commissioner issued a show-cause notice due to prima facie inadmissibility, but the appellant failed to respond despite multiple opportunities. The Order-in-Original rejected the claim, which was upheld by the Commissioner (Appeals).

The appellant argued that the order violated natural justice principles by not granting a proper hearing opportunity. The counsel contended that adjournment requests were made, supported by evidence from the Local Delivery Book and a sick leave letter. The appellant claimed the Commissioner failed to consider the appeal grounds adequately and requested a remand for a fair hearing.

The Assistant Commissioner contended that the impugned order was justified. However, the Tribunal found discrepancies in the Commissioner's observation of the appellant not seeking adjournments. Evidence of adjournment requests was presented, indicating a violation of natural justice principles due to the order being passed in the appellant's absence. Consequently, the Tribunal remanded the case to the Commissioner (Appeals) for a merit-based decision after ensuring a proper hearing opportunity for the appellant. The appellant was directed to cooperate with the Department for the hearing. The impugned order was set aside, and a De novo order on merit was instructed to be passed by the Commissioner (Appeals).