Review proceedings Cannot Go Beyond the Grounds Mentioned in SCN: CESTAT [Read Order]

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the review proceedings cannot go beyond the grounds taken in the show-cause notice. 

Capgemini Technology Service India Ltd, the appellant assessee was engaged in providing various taxable services defined under the Finance Act, 1994 and registered with the Service Tax Department. 

The assessee appealed against the order passed by the Commissioner of Service Tax for rejecting the refund claim amounting to Rs.2,06,42,881/- in terms of Rule 5 of CENVAT credit rules (CCR), 2004 read with Section 11B of the Central Excise Act, 1944. 

Prasad Paranjape, the counsel for the assessee contended that the adjudicating authority traveled beyond the scope of the show-cause notice inasmuch as the show-cause notice had only proposed for denial of the refund benefit as an intermediary. 

Also submitted that the department cannot adopt a pick and choose theory for acceptance of the order sanctioning refund in some of the cases and for denial of refund in some other cases. 

Piyush Bade, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was not eligible for a refund claim and that the rejection of the refund was as per the law and liable to be sustained. 

The Bench observed that in the case of CCE, Nagpur Vs. Ballarpur Industries, the court held that the show-cause notice was the foundation on which the department must build up its case and the department cannot urge new grounds/points which were never raised in the show-cause notice and the Review proceedings cannot go beyond the grounds taken in the show-cause notice. 

The two-member bench comprising Mohanty (Judicial) and Parthiban (Technical) held that the department cannot go beyond the grounds mentioned in the show cause notice. 

To Read the full text of the Order CLICK HERE

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