2014 (12) TMI 703 - AT - Service Tax

Tribunal grants appeal for service tax refund due to vessel change. Procedural fairness upheld.

M/s. Nirnidhi Marketing Pvt. Ltd. Versus CCE & ST, Bhopal

The Tribunal set aside the rejection of a portion of the appellant's refund claim amounting to 8,54,771 under Notification No. 17/2007-ST for service tax ... Refund claim - Notification No. 17/2007-ST - Violation of principle of natural justice - Opportunity of hearing not given - Held that:- personal hearing was held on 14.03.2012 and was attended by Shri Deepak Aggarwal Chartered Accountant on behalf of the appellants. Thus, it is incorrect to claim that no personal hearing was granted. However, there is substance in the appellants assertion that had the Commissioner (Appeals) asked them the reason for claiming refund of service tax on services relating to MV XN DA they would have been able to satisfy him about the sustainability of their claim. In these circumstances, we deem it fit that the appellants should get another opportunity to present their claim before Commissioner (Appeals). Accordingly, we set aside the impugned Order-in-Appeal to the extent it upheld the rejection of refund of ₹ 8,38,074/- and remand the matter to the Commissioner (Appeals) for de novo adjudication on merit - Decided partly in favour of assessee. Issues:Refund claim under Notification No. 17/2007-ST for service tax paid on services related to the export of iron orefine; Rejection of refund claim amounting to &8377; 8,54,771/-; Contention regarding the consignment being first loaded on MV XN DA and subsequently exported through vessel MVKS Pioneer; Lack of opportunity to produce evidence supporting the refund claim; Allegation of not being heard by the Commissioner (Appeals).Analysis:The appellant filed an appeal against Order-in-Appeal No. 87/BPL/2012 dated 24.04.2012, which upheld Order-in-Original No. 20/Refund/ST/JBP/2011 dated 01.08.2011, concerning a refund claim of &8377; 20,77,511/- under Notification No. 17/2007-ST for service tax paid on services related to the export of iron orefine. The original adjudicating authority sanctioned a partial refund of &8377; 12,22,740/- and rejected the balance refund claim of &8377; 8,54,771/-. The rejection included &8377; 8,38,074/- for not being related to the vessel MVKS Pioneer and &8377; 946/- for invoices not being connected to the export consignment. The appellant argued that the goods were initially loaded on MV XN DA but were later exported through MVKS Pioneer due to unforeseen circumstances, which was not reflected in the invoices. They claimed they were not given a chance to provide evidence supporting their claim. The Tribunal noted that a personal hearing was conducted, but the Commissioner (Appeals) did not inquire about the refund claim's specifics related to MV XN DA. Therefore, the Tribunal set aside the rejection of the refund amount of &8377; 8,38,074/- and remanded the matter for a fresh adjudication, allowing the appellants another opportunity to present their case and evidence before the Commissioner (Appeals) for a thorough review of the refund claim's admissibility.This case revolves around the appellant's refund claim for service tax paid on services related to the export of iron orefine under Notification No. 17/2007-ST. The rejection of a portion of the refund claim amounting to &8377; 8,54,771/- was based on discrepancies regarding the vessel through which the consignment was exported. The appellant argued that despite the initial loading on MV XN DA, the consignment was eventually exported through MVKS Pioneer due to unforeseen circumstances, justifying the refund claim. They contended that the Commissioner (Appeals) did not provide an opportunity to present evidence supporting this claim. The Tribunal recognized the lack of specific inquiry by the Commissioner (Appeals) into the MV XN DA-related details of the refund claim, leading to the decision to remand the matter for a fresh adjudication with an opportunity for the appellants to substantiate their claim. This highlights the importance of due process and the opportunity to present evidence in tax refund cases to ensure a fair assessment of the claim's validity.The Tribunal's decision to set aside the rejection of a portion of the appellant's refund claim and remand the matter for a fresh adjudication underscores the significance of procedural fairness and the right to present evidence in tax matters. The appellant's argument regarding the consignment being first loaded on MV XN DA and later exported through MVKS Pioneer, despite not being explicitly reflected in the invoices, raises the need for a comprehensive review of the circumstances leading to the refund claim. By allowing the appellants another opportunity to present their case and evidence, the Tribunal ensures a thorough examination of the refund claim's admissibility, emphasizing the importance of procedural justice and the right to be heard in tax disputes. This decision serves as a reminder of the principles of natural justice and the necessity for tax authorities to consider all relevant evidence before making determinations on refund claims, promoting transparency and fairness in tax adjudications.