Refund claims cannot be rejected on a new factual basis without verifying the service nature and hearing the affected party.

Refund of terminal handling charges could not be finally rejected on a factual and legal basis different from the show cause notice and the original order. The dispute turned on the true nature of the service received, including whether it was correctly treated as business support service or as port service, and the record did not clearly establish that issue. Because the appellate rejection proceeded on a new footing without proper verification of the documents and facts, the matter required reconsideration. The impugned order was set aside and the refund dispute was remanded for fresh decision after hearing the appellant.

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Issues: Whether the refund claim on terminal handling charges could be finally rejected on grounds different from those in the show cause notice and the original order, and whether the matter required remand for verification of the nature of the services received.

Analysis: The refund was originally denied on the basis that terminal handling charges were not covered by Notification No. 41/2007-ST and that the service was treated as business support service. In appeal, the rejection proceeded on a different basis, namely that the claim related to port service and that the service providers were shipping liners not shown to be authorised by the port. The issue as to the exact nature of the service actually received, and whether the original factual finding that it was business support service was correct, remained unclear on the record. Since the appellate rejection rested on a different factual and legal footing, the matter required reconsideration after examination of the documents and facts.

Conclusion: The impugned order was set aside and the matter was remanded to the Commissioner (Appeals) for fresh decision after giving the appellant an opportunity of hearing.

Ratio Decidendi: A refund dispute cannot be conclusively decided on a new factual basis without first verifying the nature of the service and affording the affected party an opportunity to meet that basis.

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