2017 (1) TMI 805 - AT - Service Tax

Natural justice - Refund claim - rejection on the ground that no documentary evidences were submitted establishing excess payment of service tax - Held that - As per the statutory provisions, Ld. Commissioner(Appeals) suppose to grant three opportunity of personal hearing which he failed to do so. Therefore Commissioner(Appeals) has violated the principles of natural justice - this is a fit case for remand the matter to Commissioner(Appeals) for re-consideration of the overall case - appeal allowed by way of remand.

Summary

Issues involved:
1. Rejection of refund claim due to lack of documentary evidence establishing excess payment of service tax.
2. Allegation of violation of principles of natural justice by the Commissioner(Appeals) in passing an ex parte order without granting adjournment.

Analysis:

Issue 1: Rejection of refund claim
The appellant had paid service tax on GTA service on a reverse charge basis initially, but later discovered an excess payment of service tax. The appellant filed a refund claim, which was rejected by the sanctioning authority citing the lack of documentary evidence proving the excess payment. The appellant submitted documents such as a detail worksheet of excess payment, copies of ST3 returns, and challans showing payment of service tax for the claimed period. The Commissioner(Appeals) upheld the rejection, stating no adjournment was sought for the second hearing notice, contrary to the appellant's claim. The Tribunal found that while some documents were submitted, the appellant should have provided additional documents if required. The Commissioner(Appeals) failed to grant the necessary three opportunities of personal hearing, violating principles of natural justice. Consequently, the Tribunal allowed the appeal by remanding the matter to the Commissioner(Appeals) for reconsideration with a directive to submit all necessary documents to establish the excess payment of service tax.

Issue 2: Allegation of violation of principles of natural justice
The appellant alleged that the Commissioner(Appeals) passed an ex parte order without following the principle of natural justice, as they did not receive the first hearing notice due to a change of address. The appellant sought an adjournment for the second hearing, which was acknowledged by the office of the Commissioner, but no adjournment was granted. The Tribunal noted that the Commissioner(Appeals) did not provide the required three opportunities for a personal hearing, as mandated by statutory provisions. This failure to grant adequate hearing opportunities constituted a violation of natural justice. Consequently, the Tribunal deemed it necessary to remand the matter to the Commissioner(Appeals) for a fresh order, directing the appellant to submit all essential documents to support the claim of excess service tax payment. The appeal was allowed by way of remand, emphasizing the importance of adhering to principles of natural justice in adjudicative proceedings.