2012 (10) TMI 763 - AT - Service Tax

Whether the non issuance of show cause notice can be held to be fatal to the Revenue s case or the Revenue should be granted an opportunity to issue show cause notice Held that - Non issuance of show cause notice would not make the respondent automatically entitle to refund claim, without considering the merits of the case - issuance of show cause notice was the preliminary requirement - matter stands remanded to the lower authorities for observing such principles of natural justice

Summary

Issues: Delay in filing appeal, rejection of refund claim, non-issuance of show cause notice

Delay in filing appeal:
The Revenue filed an appeal with a delay of more than 48 days due to administrative reasons. The delay was condoned by the Tribunal as the impugned order involved multiple appeals, which required time for information collection. The delay was attributed to administrative issues, and the COD applications were allowed.

Rejection of refund claim:
The Tribunal noted that the adjudicating authority rejected the refund claim without issuing a show cause notice. The Commissioner (Appeals) allowed the appeal solely on the ground that the show cause notice was not issued. The Revenue argued that the Assistant Commissioner had disclosed reasons for rejection and provided a personal hearing, fulfilling the principles of natural justice. The Tribunal emphasized that while the issuance of show cause notices is essential, the non-issuance alone cannot automatically entitle the respondent to a refund claim without considering the case's merits. The matter was remanded for the lower authorities to issue a show cause notice, allowing the respondents to address the objections raised by the Revenue and present their case in person.

Non-issuance of show cause notice:
The Tribunal disagreed with the Commissioner (Appeals) that the non-issuance of a show cause notice would invalidate the rejection of the refund claim. While acknowledging the mandatory nature of issuing show cause notices, the Tribunal emphasized the need to consider the case's merits alongside procedural requirements. The decision highlighted the importance of adhering to principles of natural justice and remanded the matter for proper observance of such principles by the original adjudicating authority. The impugned order of the Commissioner (Appeals) was set aside, and the case was sent back for further proceedings ensuring the respondents' opportunity to respond to the Revenue's objections.