2014 (1) TMI 1551 - AT - Service Tax

Demand of service tax - Denial of CENVAT Credit - Refund of Cenvat Credit - Assessee 100% Export Oriented Unit - Service Tax Registration Certificate not submitted - Whether the refund claimed by the respondent for certain unutilized amount of CENVAT credit taken on input services which were claimed to have been used for export of output service during the material period can be denied on the sole ground that they had not taken registration before the date on which the output service was introduced as a taxable service - Held That - Following decision of mPortal India Wireless Solutions (P.) Ltd. Versus Commissioner of Service Tax 2011 (9) TMI 450 - KARNATAKA HIGH COURT - Stay denied.

Summary

Issues:
Refund of unutilized CENVAT credit for input services used for export of output service - Denial based on lack of registration before introduction of taxable service - Final Orders by the Bench against the Department - Appeal filed by Department pending before High Court - Contention of judgment in favor of respondent by Karnataka High Court.

Analysis:
The judgment pertains to a case where the appellant sought a refund of unutilized CENVAT credit for input services utilized in exporting output services, specifically Information Technology Software Service. The central issue revolved around whether the refund claim could be rejected solely due to the lack of registration before the introduction of the taxable service. The Tribunal noted previous Final Orders by the Bench, including Final Order No.1184/10 and Final Order No.517/2012, which were against the Department on a similar issue.

The Deputy Commissioner (AR) informed the Tribunal that the Department had filed an appeal against Final Order No.1184/2010, which was pending before the Hon'ble Madras High Court. The respondent's counsel highlighted a judgment by the Hon'ble Karnataka High Court in their favor, suggesting that the Department's appeal could be dismissed based on this precedent. The Tribunal acknowledged the pendency of the Department's appeal before the High Court and decided to await the High Court's decision for the final resolution of the appeal.

The Tribunal, considering the circumstances and the existence of conflicting judgments, dismissed the stay application while awaiting the outcome of the Department's appeal before the Hon'ble High Court. The judgment reflects a cautious approach by the Tribunal in light of the legal complexities and the conflicting precedents cited by the parties. The decision to await the High Court's ruling demonstrates the importance of judicial consistency and the impact of higher court decisions on the resolution of legal disputes at the appellate level.