2016 (9) TMI 635 - AT - Service Tax

Period of limitation - Refund claim - Service tax paid on Business Support Service provided to associated enterprise which was later on amalgamated with the appellant - non-production of documentary evidences, the claim appeared to be for the period prior to date of amalgamation, on the principle of unjust-enrichment, limitation etc. - Held that - The adjudicating authority and the first appellate authority have not considered the matter on merits and have rejected the refund claim only on limitation without going into merits of the case. Further, it is alleged that the said claimant had not submitted any evidence whatsoever to prove that the service tax claimed as refund has been paid by the said claimant. It is also observed that the original adjudicating authority or the first appellate authority had no opportunity to examine the case law, now submitted by the appellant with regard to limitation as well as merits. Hence, we find that this matter has to be remanded back to the adjudicating authority for fresh decision after giving reasonable opportunity of hearing to the appellants. - Appeal allowed by way of remand

Summary

Issues:
1. Refund claim rejection on the ground of time bar without considering merits.
2. Allegation of failure to submit documentary evidence for refund eligibility.
3. Allegation of failure to prove claim not hit by time bar or unjust enrichment.

Analysis:
1. The case involved a dispute regarding a refund claim filed by the appellant related to service tax charged for business support services provided to an associated enterprise. The appellant argued that due to an amalgamation approved by the High Court with an appointed date of 01.4.2008, the transactions between the entities should be considered as service to self and not liable to service tax from that date onwards. The refund claim was rejected by the department on the basis of being time-barred.

2. The appellant contended that the issue was similar to precedents set by the Tribunal in cases such as Commissioner of Service Tax vs. ITC Hotels Limited and Indian Oil Corporation Limited vs. Commissioner of Service Tax, Mumbai. The department, however, argued that the decision in the latter case was not considered by the lower authorities. The Commissioner (Appeals) upheld the rejection of the refund claim solely on the grounds of time limitation without delving into the merits of the case or other allegations raised by the department.

3. Upon careful consideration, the Tribunal observed that the show cause notice had proposed denial of the refund claim on multiple grounds including merits, non-production of documentary evidence, unjust enrichment, and time limitation. The lower authorities failed to address the merits of the case and rejected the claim solely on the basis of time limitation. It was noted that the claimant had not provided evidence to prove payment of the service tax claimed for a refund. The Tribunal decided to remand the matter back to the adjudicating authority for a fresh decision, emphasizing the need for a thorough examination of both the limitation and merits of the case, and granting the appellants a reasonable opportunity for a hearing. All issues were kept open for further consideration.

Conclusion:
The Tribunal allowed the appeal by way of remand, directing a reevaluation of the refund claim in light of both the time limitation and the merits of the case, ensuring a fair opportunity for the appellants to present their case.