2011 (2) TMI 1059 - AT - Service Tax

Business Auxiliary service - Refund claim rejected on the ground that the appellant had not disputed the service tax - Held that - Commissioner (appeals) upheld the Order-in-Original regarding the rejection of the refund claim & further ordered that if any demand is confirmed on the same activity for the same period the amount already paid by the appellant needs to be adjusted against the same. This adjustment of the refund amount rejected would amount to sanction of the refund claim therefore there is a contradiction in the findings of the Commissioner (Appeals) - remand the case back to the Commissioner (Appeals) for de novo order.

Summary

Issues: Refund claim rejection under Sec.11B of Central Excise Act and Section 83 of Finance Act, 1994.

The appellant filed a refund claim for Rs. 338749/- under Sec.11B of the Central Excise Act and Section 83 of the Finance Act, 1994, stating they were not liable to service tax under 'Business Auxiliary service'. The claim was rejected by the Asstt. Commissioner on the grounds that the appellant did not dispute the service tax. The appellant appealed to the Commissioner (Appeals), who upheld the rejection and ordered adjustment of any confirmed demand against the amount paid. The Tribunal found a contradiction in the Commissioner's findings and remanded the case for a fresh decision after providing the appellant with a reasonable opportunity to be heard.

The Tribunal observed that the Commissioner (Appeals) upheld the rejection of the refund claim by the Asstt. Commissioner. However, the Commissioner also ordered adjustment of the amount paid by the appellant against any confirmed demand for the same activity and period. This adjustment effectively sanctioned the refund claim, leading to a contradiction in the Commissioner's decision. Therefore, the Tribunal remanded the case back to the Commissioner (Appeals) for a fresh decision, emphasizing the importance of providing the appellant with a fair opportunity to present their case.

In conclusion, the Tribunal allowed the appeal by way of remand, highlighting the need for a consistent and reasoned decision-making process in handling refund claims under the relevant provisions of the Central Excise Act and the Finance Act, 1994. The case underscores the significance of ensuring procedural fairness and clarity in resolving disputes related to service tax liabilities and refund claims, ultimately aiming to uphold the principles of natural justice and legal certainty in tax matters.