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TMI Blog2016 (7) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... s appellant has been totally deprived of knowing the allegations or putting forward, a defence against the grounds for rejection of refund. Thus there has been in a way application of the formula twice over. Similar issue was considered by Tribunal in the case of CST, Mumbai-I Vs. Global Markets Centre (P) Ltd. [2015 (2) TMI 271 - CESTAT MUMBAI]. The Tribunal observed that the formula used the word total CENVAT credit taken on input services . Therefore the inadmissible part of input services cannot be deducted before applying the formula. In the absence of show-cause notice, the rejection of ₹ 4,41,981/- is unsustainable. For the reasons discussed in earlier paragraphs, the impugned order to the extent of rejecting the refund c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtered Accountant service, manpower recruitment or supply agency service, commercial training or coaching services, advertising agency services to an extent of ₹ 4,41,981/- was disallowed observing that there is no nexus between the input services and the output service exported. 4. Again, since there was DTA services provided by other units of the appellant, the original authority observed that CENVAT credit eligible for refund has to be restricted proportionately and the refund allowed was erroneously reduced by ₹ 83,774/-. 5. The appellants filed appeal before the Commissioner(Appeals) raising the contention that principles of natural justice is violated and the impugned order passed without issuing show-cause notice an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f show-cause notice cannot be viewed as a mere technical breach. In the case of CCE Cus, Aurangabad Vs. Sidheshwar SSK Ltd. [2011(274) ELT 141 (Tri. Mumbai)], the refund claim was rejected by department without issuing a show-cause notice. The Commissioner(Appeals) set aside the order of rejection on the ground of absence of show-cause notice. The Revenue s appeal against this order was dismissed by the co-ordinate Bench of the Tribunal observing that the conclusion of adjudication proceedings without issuing a show-cause notice cannot be sustained. 8. The issuance of show-cause notice puts the affected person on notice as to what is the department s case/view on the refund claim. The notice should specify the reasons on which the depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alid and proper. The appellant has failed to establish that such services are necessary for providing the output services and that therefore the rejection of refund is proper. 10. I have heard both sides. The foremost issue that needs to be addressed is the non-issuance of show-cause notice. After filing of refund claim by the appellant, without conduct of personal hearing, the original authority has unilaterally decided to allow refund of ₹ 52,33,074/- and reject claim of ₹ 4,41,981/-. It is explained by appellant that the amount of refund allowed has been reduced by an amount of ₹ 83,744/- by wrong application of formula by the original authority. 11. Admittedly, no show-cause notice was issued to the appellant spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be ( unutilized credit or refund eligible as per Rule 5 whichever is lower) = 57,58,829 13. Thus as per the formula, the total credit taken (E) has to be applied to compute the refund credit. The original authority first held on merits that ₹ 4,41,981/- is not eligible for refund as there is no nexus. This amount was deducted from the total claim of refund which is ₹ 57,58,829/- (i.e. 57,58,829 4,41,981 = 53,16,848). This figure 53,16,848 was considered to be the eligible refund. To this amount, the original authority has applied the formula to again arrive at the eligible refund. 5316848 x 485096998 =53,33,074/492862714 14. Thus there has been in a way application of the formula twice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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