2009 (12) TMI 562 - AT - Service Tax

Waiver of pre-deposit - Rebate claim unjust enrichment rebate of service tax on input services used in export of services rebate of Rs. 2,50,54,831/- has been erroneously paid in cash and the same should have been credited to the Consumer Welfare Fund Held that - Commissioner has not held that the rebate claim was not admissible - only ordered recovery from the Appellant and crediting to the Consumer Welfare Fund - Applicant has made out a case for waiver of pre-deposit

Summary

Issues:
1. Rebate claim rejection and sanction by the Original Authority.
2. Revision proceedings initiated by the Commissioner under Section 84 of the Finance Act.
3. Applicability of Tribunal's earlier decision on the same issue.
4. Dispute over the denial of rebate claim due to violation of notification conditions.
5. Consideration of waiver of pre-deposit and stay on recovery of dues.

Analysis:
1. The Original Authority sanctioned a rebate claim of Rs. 2,50,54,831/- but rejected another claim of Rs. 38,14,138/-. The Appellant succeeded in their appeal against the rejection before the Commissioner (Appeals).

2. The Commissioner initiated Revision proceedings under Section 84 of the Finance Act, stating that the rebate of Rs. 2,50,54,831/- was erroneously paid in cash and should have been credited to the Consumer Welfare Fund. The Commissioner ordered the recovery of the amount from the Appellant for crediting it to the Fund.

3. The Appellant argued that the Commissioner's revision order contradicted the Tribunal's earlier decision on the same issue involving the same Appellant. They highlighted that the Tribunal's decision exempted rebate claims from unjust enrichment provisions under Section 11B of Central Excise.

4. The Department's representative contended that the Commissioner did not ignore the Tribunal's order but based the recovery decision on different facts. The denial of the rebate claim was attributed to the violation of conditions specified in Notification No. 12/2005-S.T., dated 19-4-2005.

5. Upon reviewing the submissions, the Tribunal found that if the notification conditions were violated, the rebate claim should have been entirely denied. The Tribunal noted that the Commissioner did not declare the rebate claim as inadmissible but ordered recovery and crediting to the Consumer Welfare Fund. The Tribunal considered the earlier decision's applicability and granted a waiver of pre-deposit, staying the recovery of dues pending the appeal hearing scheduled for 8-2-2010. The Tribunal also acknowledged the plea for expedited hearing due to the significant amount involved and potential recurring impact.