2023 (12) TMI 253 - AT - Service Tax

Refund of Service Tax - Erection, Commissioning Installation services for transmission of electricity which is exempted under Notification No. 11/2010-ST dated 27.2.10 - impugned order passed without affording an opportunity of hearing - violation of principles of natural justice - HELD THAT - The appellant has proved on record that he has paid the service tax for the month of April, May and June 2010 amounting to Rs. 7,27,884/-. Further, the Notification No. 11/2010-ST dated 27.02.2010 provided that the services provided by any person to another person for transmission of electricity is exempt from service tax. The appellant has filed various documents as was demanded by the original authority but the original authority has wrongly come to the conclusion that the appellant has failed to establish whether the service tax paid for the month of April, May and June, 2010 is for the services provided by them for period after issuance of Notification No. 11/2010-ST or otherwise. The Ld. Commissioner (Appeals) has passed the impugned order without affording an opportunity of hearing to the appellant and without considering all the submissions made by him in his appeal. Both the authorities have wrongly come to the conclusion that the burden of duty has already been passed on to the customers. Both the authorities did not examine the invoices/bills submitted by the appellant. There is no invoice wherein the appellant has charged service tax and in the absence of specifically charging the service tax, it cannot be presumed that service tax has been actually charged. Moreover, the appellant has paid service tax on the gross value received from PSEB which is a Government undertaking and as per the terms and conditions of the work order, it is the responsibility of the appellant for payment of all the taxes and duties due to the Central Government. This case needs to be remanded back to the original authority for denovo adjudication of the refund application filed by the appellant - Appeal allowed by way of remand.

Summary

Issues involved:
The appeal against rejection of refund claim of service tax amounting to Rs. 7,27,884 filed by the appellant.

Facts of the case:
The appellant, engaged in the manufacture of transformers, filed a refund claim for service tax paid on Erection, Commissioning & Installation services for transmission of electricity exempted under Notification No. 11/2010-ST. The department raised objections, demanded documents, and rejected the refund claim. The appellant submitted evidence including work orders, invoices, and a certificate from Punjab State Electricity Board.

Contentions:
The appellant argued that they were entitled to the benefit of Notification 45/2010 dated 20.07.2010, which exempted services even for the period before 27.02.2010. They contended that the refund claim was within the limitation period. The appellant also disputed the authorities' conclusion that the burden of duty had been passed on to customers, stating they had not charged service tax in their invoices to PSEB.

Decision:
After considering submissions, the Tribunal found that the appellant had paid service tax for the relevant period and had submitted necessary documents. The Tribunal disagreed with the original authority's conclusion that the appellant had failed to establish the timing of services provided. It also noted that the Commissioner (Appeals) had not afforded a proper hearing to the appellant. The Tribunal directed a remand to the original authority for a fresh adjudication, considering the notifications and documents provided by the appellant, with a deadline of 2 months for completion.

Outcome:
The appeal was allowed by way of remand for denovo adjudication of the refund application filed by the appellant.