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2024 (3) TMI 856 - AT - Service TaxExemption for export promotion under N/N. 18/2009-ST dated 01.07.2009 - seeking relief of taxes paid on the services used in manufacture of export products - failure to submit the relevant documents showing the payment of commission to their foreign commission agents - HELD THAT:- The Hon’ble Apex Court in a Constitution Bench judgment in S. AMARJIT SINGH KALRA (DEAD) BY L. RS. & ORS. VERSUS PRAMOD GUPTA (DEAD) BY L. RS. & ORS. [2002 (12) TMI 607 - SUPREME COURT] observed Laws of procedure are meant to regulate effectively, assist and aid the object of doing substantial and real justice and not to foreclose even an adjudication on merits of substantial rights of citizen under personal, property and other laws. Procedure has always been viewed as the handmaid of justice and not meant to hamper the cause of justice or sanctify miscarriage of justice. It is not disputed that there has been a delay in filing the EXP-2 Return the reason for which has been explained by the Appellant. This delay is not shown to cause any prejudicial consequence for Revenue. However, the Appellant had furnished material which shows a substantial compliance with the requirements of the exemption notification - While determining whether a provision is mandatory or directory, in addition to the language used in the notification, the context in which the provision is used and the purpose it seeks to achieve should also be examined. A beneficial legislation should not be viewed very rigidly. It is noted that there were no allegations of any blame worthy act by the Appellant. The claim should hence have been scrutinized and the Appellant allowed to satisfy whatever doubts that the Original Authority had. In the circumstances, the substantial rights of the appellant should not have been denied on procedural grounds. An order imposing a penalty involves an exercise of judicial discretion, which requires the decision to be fair, reasonable and objective. On the obverse side, anything arbitrary and whimsical would not satisfy the said requirement. This action of the Lower Authority has surprisingly found no comment in the impugned order and is defective to that extent. A simple act of claiming a tax benefit cannot be at the pain of being held liable for penalty. Such an order cannot be allowed to survive - there are no hesitation in not only quashing the penalty but also in setting aside the order. Matter remanded back to the Original Authority for de novo adjudication on merits of the Appellants claim for duty exemption as per Notification 18/2009 Service Tax, dated 07/07/2009 only - appeal disposed off.
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