The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) directed re-adjudication for rejecting the service tax refund claim without issuing the show cause notice (SCN).
Haldor Topsoe India Private Limited, the appellant assessee provided taxable services, namely, ‘management of business consultant services’ by exporting them out of India to overseas clients and filing refund claims under the Notification issued under rule 5 of the CENVAT Credit Rules, 2004.
The assessee appealed against the order passed by the Commissioner (Appeals) to confirm the rejection of the service tax refund claim.
Yogesh Jain, the counsel for the assessee contended that it was imperative for the adjudicating authority to have at least issued a show cause notice to the assessee indicating the grounds on which the refund claims filed by the assessee were proposed to be rejected, but since the show cause notice had not been issued, the principles of natural justice had been violated.
Jaya Kumari, the counsel for the department contended that since clarification had been sought and the authorized representative of the assessee had also appeared, the principles of natural justice had not been violated.
The Bench observed that merely seeking certain information or clarification from the assessee does not serve the purpose. Unless the assessee was specifically informed about the grounds on which the refund claims are proposed to be rejected, the assessee would not know the grounds on which the refund claims would be rejected and so would not be in a position to explain its position.
The two-member bench comprising Dilip Gupta (President ) and Subba Rao (Technical) quashed the rejection of the service tax refund claim while allowing the appeal filed by the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
