2023 (9) TMI 296 - AT - Service Tax

Disallowance of refund sanctioned erroneously by the adjudicating authority - exercise of power of revision under Section 84 of the Finance Act - unjust enrichment - request of appellant not discussed - proper opportunity of hearing not provided - violation of principles of natural justice - HELD THAT - The exercise of power of revision by the Commissioner under Section 84 after the expiry of more than one year and ten months from the date of sanctioning of refund is not justified, secondly issuance of show cause notice dated 28.12.2010 affording one opportunity on four dates mentioned in the said notice only amount to one opportunity. There are no reason not to grant a week s time to the appellant to file reply to the show cause notice. It appears from the impugned order that the Commissioner was bent upon passing the impugned order without affording any opportunity of hearing to the appellant. Further, the Commissioner has not even declined the request of the appellant and has not discussed his request at all in the impugned order. Unjust enrichment - HELD THAT - Once the nestle has issued the certificate dated 23.01.2009 certifying that during the period 01.01.2005 to 31.10.2006 the appellant has not claimed any service tax from them, therefore, the question of unjust enrichment does not arise, but in the impugned order Commissioner (Appeals) did not consider any evidence whatsoever to come to the conclusion that principle of unjust enrichment is applicable in the present case. The impugned order is not sustainable in law - Appeal allowed.

Summary

Issues:
The judgment involves the disallowance of a refund by the Commissioner under Section 84 of the Finance Act, based on the aspect of unjust enrichment, without affording proper opportunity of hearing to the appellant.

Summary:
The appellant, a Rent-a-Cab operator, was issued a show cause notice for recovery of service tax. The Assistant Commissioner confirmed the demand, and the appellant deposited an amount with the department. The Commissioner (Appeals) accepted the appeal and the appellant filed a refund claim, which was finalized and sanctioned. Subsequently, a show cause notice was issued by the Commissioner of Central Excise, Chandigarh, questioning the refund on grounds of unjust enrichment.

The appellant argued that the impugned order was passed in violation of principles of natural justice, as the show cause notice was issued after a significant delay and no opportunity of hearing was granted. The Commissioner had not considered evidence regarding unjust enrichment and passed the order without proper examination.

The appellant presented a certificate from the service recipient stating that no service tax was claimed during a specific period, indicating no unjust enrichment. The Tribunal found that the Commissioner's actions were not justified, as the delay in revision and lack of proper opportunity of hearing were not in accordance with the law. The impugned order was set aside, allowing the appeal of the appellant with consequential relief, if any as per law.