2009 (11) TMI 467 - AT - Service Tax

New Ground- This appeal filed by M/s. Information Technology Park of India Ltd (ITPI) seeks to vacate an order of the Commissioner (Appeals) which sustained the order of the original authority rejecting their refund claim for an amount of Rs. 64,04,003/- paid by them in May 2006 and September 2006 towards Construction of Commercial Complex (CCC) service rendered by them. Held that - The order is non-speaking with reference to the proposals in the show cause notice. The Commissioner (Appeals) could not have validly sustained the said order; he supplemented the grounds for rejection of the claim without the appellants having been put on notice on such grounds. In the circumstances we vacate both the orders of the lower authorities and remand the matter to the original authority for taking a fresh decision.

Summary

Issues:
Refund claim rejection for Construction of Commercial Complex (CCC) service under service tax exemption for SEZ developer.

Analysis:
The appeal filed sought to vacate an order rejecting a refund claim for service tax paid under CCC service by the appellant, an SEZ developer. The appellant claimed exemption under Notification No. 04/2004-S.T. The original authority and the Commissioner (Appeals) rejected the claim. The appellant submitted requested documents during the appeal, but the Assistant Commissioner rejected the claim without proper justification, leading to a challenge on grounds of natural justice.

During the hearing, the appellant provided necessary documents, including SEZ certificate, ST-3, Invoices, Bank statement, and Agreement. The Assistant Commissioner's rejection was criticized for lacking justification and not aligning with the show cause notice. The impugned order was supported by the SDR, arguing that the tax paid was legitimate and could not be converted into advance consideration. The rejection was deemed appropriate.

The Tribunal found the rejection order non-compliant with natural justice principles. The order did not adequately address the grounds proposed in the show cause notice. The Commissioner (Appeals) also erred in supplementing rejection grounds without prior notice to the appellant. As a result, both lower authorities' orders were vacated, and the matter was remanded to the original authority for a fresh decision, emphasizing the need for the appellant's fair opportunity to present their case.

In conclusion, the Tribunal allowed the appeal by remanding the case for a fresh decision, ensuring the appellant's right to a fair hearing. The judgment highlighted the importance of adhering to principles of natural justice in such matters.