2019 (2) TMI 479 - AT - Service Tax

SEZ unit - Refund of service tax - N/N. 12/2013-ST - rejection on the ground that the claim was filed beyond the period of one year stipulated in the notification - Held that - The bulk of the demand pertains to rejection of invoices meant for waste disposal services availed by the appellant on the ground that these were not approved by the Development Commissioner. No show cause notice was issued to the appellant on this ground. The show cause notice which was issued was only covering another part of the refund claim - the principles of natural justice have been violated and therefore the matter needs to be remitted to the original authority with direction to issue a show cause notice - appeal allowed by way of remand.

Summary

Issues:
1. Delay in filing refund claim.
2. Rejection of refund claim for waste disposal services.
3. Violation of principles of natural justice.

Analysis:
1. The appellant, an SEZ unit, imported raw sugar for reprocessing and export, filing a refund claim for service tax paid on input services. The claim was rejected by lower authorities citing delay in filing beyond the stipulated one-year period. The appellant argued the delay was due to obtaining necessary certificates and should have been condoned. Citing a precedent, the appellant contended that such delays were previously condoned. The Asst. Commissioner recorded insufficient reasons for not condoning the delay, leading to an appeal.

2. Another part of the claim, amounting to &8377; 20,80,749 for waste disposal services, was rejected on the grounds of lacking approval from the Development Commissioner. The appellant argued that this rejection was beyond the scope of the show cause notice, which did not seek to reject this amount. The appellant asserted that waste disposal could be considered part of approved cleaning activities, citing relevant case laws. The departmental representative acknowledged that rejecting this amount exceeded the show cause notice's scope.

3. The tribunal found that rejecting the waste disposal services refund without prior notice violated natural justice principles. It was determined that the matter should be remitted to the original authority to issue a show cause notice covering all refund amounts subject to rejection. The tribunal allowed the appeal by way of remand, refraining from commenting on the case's merits and leaving all issues open for further consideration. The decision was pronounced in open court, emphasizing the need to ensure due process and adherence to natural justice principles.