2015 (12) TMI 493 - AT - Service Tax

Denial of refund claim - Information Technology Service - delay in seeking registration - cenvat credit pertain to previous quarter - Held that - M/s MVIPL are entitled to full amount of refund of Cenvat Credit for all the input services in question. The total amount of refund claimed by M/s MNIPL is ₹ 5,48,556/- which is admissible to them as per the law of Service Tax, when definition of input service as given under Rule 2(l) of the Cenvat Credit Rules, 2004 is very clear. - These procedures are framed for facilitation of implementation of substantive law; these procedural requirements cannot stifle the implementation of the substantive law on the subject. It is pointed out that Information Technology Service came under the net of service tax law during that period only and M/s MNIPL or other such concern would not immediately fathom full implications of the law announced; therefore, a slight delay in filing for the registration by the assessee with the Department cannot become a valid ground for rejecting their refund claim. It has also been pointed out by the learned C.A. appearing for the appellant that Circular No. 120/01/2010-S.T. allows filing of refund claim on quarterly basis and an exporter can claim refund for previous quarter in the next quarter. - Appeal disposed of.

Summary

Issues:
- Grant of refund of service tax paid on input services for exports by the assessee
- Validity of refund claimed by the assessee for the input services
- Procedural requirements for filing refund claims
- Interpretation of the definition of "input service" under Rule 2(l) of the Cenvat Credit Rules, 2004

Analysis:

The judgment concerns two appeals, one filed by the assessee and the other by the Revenue, both related to the grant of refund of service tax paid on input services for exports made by the assessee. The Revenue argues that the refund granted to the assessee is not valid as they got registered after the period for which they are claiming the refund. The assessee contends that they filed for registration within a month of the service coming under the service tax net. The Revenue asserts that the assessee should file refund claims every month, while the assessee argues they should file claims every quarter. The assessee's refund claim was partly rejected by the Commissioner (Appeals) for certain services, but the assessee argues that the nexus of these services with their output services is clear and supported by legal precedents.

The Tribunal, after considering the arguments from both sides, finds that the assessee is entitled to the full amount of refund of Cenvat Credit for all the input services claimed. The definition of "input service" under Rule 2(l) of the Cenvat Credit Rules, 2004 is crucial in determining the admissibility of the refund claim. The Tribunal emphasizes that procedural requirements, such as monthly or quarterly filing of refund claims and registration prior to claiming refunds, cannot override substantive law. The delay in registration due to the introduction of the service tax law is considered reasonable, and the Tribunal highlights that Circular No. 120/01/2010-S.T. allows for quarterly filing of refund claims by exporters.

In conclusion, the Tribunal allows the appeal filed by the assessee, granting them the refund, and rejects the appeal filed by the Revenue. The judgment clarifies the interpretation of the definition of "input service" and emphasizes that procedural requirements should not impede the implementation of substantive law.