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2018 (5) TMI 1124 - AT - Service Tax100% EOU - Refund claim - rejection primarily holding that the difference between the amount claimed as refund and amount debited in ST3 has to be deducted from the claim amount - Held that - the appellant has lnadvertently short-debited in ST3 return to the extent of ₹ 27,64,742/- which the appellant has stated that they have rectified the defect but the documents were not produced before the authorities to justify the claim - case remanded to the original authority with a direction to examine the refund claim de novo after examining and verifying the documents which may be produced by the appellant in support of their claim - appeal allowed by way of remand.
Issues:
Refund claim of service tax paid on input services under Notification No. 12/2013-ST; Disallowance of refund by Assistant Commissioner; Appeal before Commissioner(Appeals) challenging the disallowance; Discrepancy in the amount claimed as refund and amount debited in ST3 return; Grounds for denial of refund not mentioned in show-cause notice; Misunderstanding by Commissioner(Appeals) between short debit of CENVAT credit and short-payment of taxes. Analysis: The appellant, engaged in providing Information Technology Software Services (ITSS) as a 100% EOU registered with STPI and a unit in SEZ, filed a refund claim of service tax paid on input services amounting to ?6,62,09,557/- for the period July 2014 to September 2014 under Notification No. 12/2013-ST. The Assistant Commissioner disallowed the refund in part, citing a discrepancy between the claimed refund amount and the amount debited in the ST3 return. The Commissioner(Appeals) upheld this disallowance, despite the appellant's argument that the ground for denial was not mentioned in the show-cause notice, which is legally unsustainable. The appellant contended that the Commissioner(Appeals) misunderstood the issue, mistaking a short debit of CENVAT credit for a short-payment of taxes, leading to an erroneous decision. The appellant argued that the impugned order was based on a short debit of CENVAT credit in the ST3 return, not a short-payment of taxes, and that the Commissioner(Appeals) failed to consider the appellant's rectification of the alleged defect. The appellant emphasized that the denial was due to procedural non-compliance, which should not negate the substantive benefit of the refund claim. The learned consultant cited relevant legal precedents to support the argument that the order was contrary to the show-cause notice and lacked legal sustainability. In response, the learned AR defended the impugned order, maintaining the position taken by the Assistant Commissioner and the Commissioner(Appeals). After hearing both sides and examining the records, the Judicial Member found that the issue at hand was indeed related to a short debit of CENVAT credit, not a short-payment of taxes. The Judicial Member noted that the appellant had rectified the alleged defect but had not provided the necessary documents to substantiate the claim. Consequently, the Judicial Member remanded the case back to the original authority with directions to re-examine the refund claim after verifying the supporting documents produced by the appellant. The Judicial Member emphasized the importance of following principles of natural justice and considering the legal decisions cited by the appellant in the process. In conclusion, the appeal was allowed by way of remand, highlighting the need for a thorough re-evaluation of the refund claim in light of the procedural and substantive aspects involved, ensuring a fair and just determination based on the principles of law and natural justice.
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