2010 (5) TMI 243 - AT - Service Tax

Recovery of erroneous refund- Refund denied in impugned order on the ground that business auxiliary services of procuring orders not an input service for appellant in his capacity as manufacturer. Held that- ground taken in impugned orders not raised in show cause notice thus impugned order not sustainable.

Summary

The Appellate Tribunal CESTAT, Chennai allowed the appeals of the assessees regarding the recovery of refund of credit of input service tax. The recovery was proposed on the basis that Rule 3 of the CENVAT Credit Rules, 2004 did not cover provisions of Section 66A of the Finance Act, 1994. However, the Tribunal found that the denial of refund was based on a ground not raised in the show-cause notice, which is not permissible. Therefore, the impugned orders were set aside, and the appeals were allowed.