2018 (9) TMI 1383 - AT - Service Tax

Refund of Service tax paid - residential complex service - refund was denied placing reliance on some statements given to the divisional authorities - principles of natural justice - Held that - It transpires from the available records that copy of the statement has never been supplied to the appellant before adjudication of the matter. Thus, the original order has been passed by the Asst. Commissioner (Refund) in gross violation of principles of natural justice. The learned Commissioner (Appeals) has not acceded to the specific request made by the appellant for verification of the statement submitted to the divisional authorities - ends of justice will be met, if the matter is remanded to the original authority for readjudication of refund issue - appeal allowed by way of remand.

Summary

Issues Involved:
1. Rejection of refund claim of service tax paid on residential complex service.
2. Violation of principles of natural justice in the adjudication process.

Analysis:
1. The appeal challenged the rejection of a refund claim for service tax paid on a residential complex service due to the cancellation of a contract. The appellant argued that the service tax amount paid on an advance receipt should be eligible for a refund. However, the original authority and the Commissioner (Appeals) upheld the rejection based on a verification report without providing the appellant with a copy of the report, leading to a violation of natural justice.

2. The appellant contended that the principles of natural justice were violated as they were not given an opportunity to review the divisional authorities' report, which was relied upon in the decision-making process. The appellant's advocate argued that the Commissioner (Appeals) rejected the appeal mechanically without considering the lack of access to the report, further emphasizing the breach of natural justice.

3. The Revenue representative reiterated the findings of the impugned order, supporting the denial of the refund claim based on the divisional authorities' statements. However, the Tribunal found that the original order was passed in violation of natural justice as the appellant was not provided with a copy of the statement before adjudication.

4. After hearing both sides and examining the records, the Tribunal concluded that the denial of the refund claim was unjust due to the lack of access to crucial documents by the appellant. The Tribunal decided to remand the matter to the original authority for a fresh adjudication, directing the supply of the divisional authorities' report to the appellant for a fair consideration of the refund issue.

5. The Tribunal emphasized the importance of adhering to principles of natural justice in the adjudication process and instructed the original authority to allow the appellant a personal hearing and cooperate in reaching a proper conclusion on the refund entitlement. The appeal was allowed by remanding the matter for further review and decision-making by the original authority.

In conclusion, the Tribunal's judgment focused on rectifying the procedural flaws in the adjudication process, ensuring the appellant's right to a fair consideration of their refund claim concerning service tax paid on a residential complex service.