2015 (7) TMI 467 - AT - Service Tax

Denial of refund claim - in the second proceedings original authority has found that a portion of the refund claim was time-barred which shows that there was no proper verification of documents. - Non fulfillment of conditions prescribed in the Board s Circular No. 97/08/2007 dated 23.08.2007 - Held that - the application for refund was rejected by the Assessing Authority. It was, however, allowed by the Appellate Authority. It is not in dispute that no further appeal was taken therefrom. The said order, therefore, attained finality. It matters little as to whether the application for refund was in the prescribed form or not. In any case once all the refund claims and their fate had attained finality in the order of the Commissioner (Appeals), no further action could have been taken except the option of appealing against that decision and recover the lost ground which has been missed. I also agree with the submissions that this is a case where the decision of the Hon ble Supreme Court in the case of Kamlakshi Finance Corporation Ltd. 1991 (9) TMI 72 - SUPREME COURT OF INDIA is applicable and therefore the order should have been simply implemented. - Appellant would be eligible for the interest after 3 months from the date of filing the claim in this case so that another round of litigation is not initiated by not granting the interest by the original authority

Summary

Issues:
Refund claims rejection under Notification No. 05/2006-CE (NT) dated 14.03.2006 under Rule 5 of Cenvat Credit Rules 2004; Commissioner (Appeals) allowing appeals based on verification report; Fresh proceedings initiated by Revenue; Finality of Commissioner (Appeals) order; Legal process adherence by Revenue; Unwarranted second round of litigation.

Detailed Analysis:

1. The appellant, a 100% EOU, filed 4 refund claims totaling Rs. 6,42,052 for the period from October 2005 to September 2007 under Notification No. 05/2006-CE (NT) under Cenvat Credit Rules 2004. The original authority rejected the claims, but the Commissioner (Appeals) allowed them after verifying fulfillment of 3 conditions specified in a circular regarding place of removal. The Revenue did not appeal this decision.

2. Subsequently, the Revenue initiated fresh proceedings by issuing a show-cause notice in 2010, questioning the fulfillment of conditions despite the Commissioner's previous order. The original authority again rejected the claims, and the Commissioner (Appeals) upheld this decision without addressing the finality of the previous order.

3. The appellant argued that the 2009 order's finality rendered subsequent proceedings void. They contended that the Revenue failed to provide evidence to invalidate the verification report, citing legal precedents emphasizing the finality of orders and the need for judicial discipline.

4. The Revenue claimed that a portion of the refund claim was time-barred, indicating improper verification. However, the Tribunal noted that the Revenue missed opportunities to rectify errors and file appeals at various stages.

5. The Tribunal observed that the Revenue's failure to include all grounds for rejection in the show-cause notice limited their ability to challenge the refund claim. The Commissioner (Appeals) had properly considered the issue based on verification, and the Revenue missed chances to rectify errors.

6. The Tribunal criticized the Revenue for issuing a second show-cause notice after the 2009 order attained finality, stating that such actions were illegal and against judicial discipline. Legal precedents were cited to support the view that the subsequent proceedings were unwarranted.

7. The Tribunal deemed the second round of litigation initiated by the Revenue as void and concluded that the appeal should be allowed with consequential relief for the appellants. Interest eligibility after 3 months from filing the claim was also emphasized to prevent further litigation due to delayed interest payments.

In summary, the judgment highlighted the importance of legal process adherence, finality of orders, and the need for judicial discipline in handling refund claims, ultimately ruling in favor of the appellants due to unwarranted subsequent proceedings by the Revenue.