2018 (9) TMI 1590 – CESTAT CHENNAI – TMI – Refund of Service Tax paid – case of appellant is that they have not been issued a show cause notice proposing to deny the refund claim – principles of natural justice – Held that:- A notice is a right of the party to enable him to know the grounds for rejection of the refund claim so as to arm himself to defend the case. It is the foundation of any lis in taxation proceedings. Without issuance of such show cause notice, the adjudicating authority has gone into the matter and rejected the refund claim. In appeal, Commissioner (Appeals) has upheld the same and also added a further ground for rejection.
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The rejection of refund claim without issuance of show cause notice cannot sustain – appeal allowed – decided in favor of appellant. – Appeal Nos. ST/2 and 3/2010 – Final Order Nos. 42188-42189/2018 – Dated:- 31-7-2018 – Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri Raghavan Ramabhadran, A
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the refund claim, the original authority came to the conclusion that the refund claim for the quarter ending January to March 2008 is time-barred as the same was initially filed before the Hyderabad Commissionerate, and the date of filing before Hyderabad Commissionerate has to be considered for computing the limitation. The second ground for rejection was that the appellant cannot claim refund based on the percentage of production of each unit. In appeal, the Commissioner (Appeals) has confirmed the rejection of both refund claims on one additional ground stating that the CHA services is not a notified service prior to 1.4.2008 under Notification 41/2007-ST. Thus, both the refund claims were disallowed against which the appellants are now before the Tribunal. 3. The ld. counsel Shri Raghavan Ramabhadra appeared and argued the matter on behalf of the appellant. He submitted that the issue of time bar is only with respect to the refund claim for the quarter ending January to March 2008.
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regarding these grounds. 4. He vehemently argued that the refund claims were rejected without issuing any show cause notice to the appellant. Even a deficiency memo pointing out the deficiencies in the refund claims were not issued to the appellant. Thus, non-issuance of show cause notice is fatal to the adjudication and has resulted in violation of principles of natural justice. On this sole ground, the rejection of refund cannot sustain. He placed reliance on the decision of the Tribunal in the case of CC Vs. Goodwill Sales Pvt. Ltd. – 2016 (343) ELT 1193 (Tri. Mum.). He also relied upon the following decisions:- a. Veera Spinning Mills P. Ltd. Vs. Commissioner of Central Excise, Coimbatore – 2001 (131) ELT 437 (Tri. Chennai) b. Commissioner of Central Excise, Aurangabad Vs. Sidheshwar SSK Ltd. – 2011 (274) ELT 141 (Tri. Mum.) c. D.E. Shaw India Software Pvt. Ltd. Vs. Commissioner of Central Excise, Hyderabad – 2016 (3) TMI 725 – CESTAT Hyderabad 5. The ld. AR Shri S. Govindarajan su
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er the reason for delay as the refund claim was presented before the wrong forum. In the said letter, the appellants have specifically stated that they may be issued a show cause notice in case the department intends to reject the refund claim. Even after requesting for issuance of show cause notice the department has not bothered to issue a show cause notice to the appellant. It may be correct that they were called for personal hearing on 16.12.2008. But the said personal hearing cannot substitute the requirement to issue notice giving grounds proposing for rejection. A notice is a right of the party to enable him to know the grounds for rejection of the refund claim so as to arm himself to defend the case. It is the foundation of any lis in taxation proceedings. Without issuance of such show cause notice, the adjudicating authority has gone into the matter and rejected the refund claim. In appeal, Commissioner (Appeals) has upheld the same and also added a further ground for rejectio
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ity. It is settled law that claim may be rejected and, concomitantly, settled law insists that detriment cannot be visited upon a taxpayer without prior notice. No such notice was issued by the Assistant Commissioner of Customs ever. Though we observe that he has recorded waiver of right to notice by the claimant, the circumstances of this waiver are not recorded and it is reasonable to deduce that the claimant may not, in the most pessimistic of moods, have imagined that the claim would be rejected. Had the claimant been aware that the refund was liable to be rejected because of failure to dispute assessment, the reaction may well have been to rectify the alleged defect. In such a circumstance, the refund claim need not have been disposed of but kept pending till the correctness of enhancement was decided upon in appeal. And the assessment dispute now stands settled by the appellate authority. 8. We find that the said decision would squarely apply to the facts of the case. The ld. AR
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