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2018 (6) TMI 814 - AT - Service TaxRefund of CENVAT credit - export of services - rejection on the ground that they had not debited the CENVAT credit amount from their books of accounts at the time of making the claim as required - It is further alleged that the refund claim amount was not reflected in the Service Tax returns filed by the appellant during the relevant period and the general ledger of the assesse to show that the duty has been debited cannot be considered as evidence, it being a private record. Held that - It is clear that N/N. 05/2006 CE (NT) lays down that the amount claimed as refund of CENVAT amount should be debited before applying for the Refund and the appellant had not done so. They have debited the amount, but much later and thereby they violated the condition 2(h) of the notification. The Adjudicating Authority had, therefore, rejected the refund and the First Appellate Authority has upheld the Order-in- Original and rejected the appeal - It was a technical mistake which has been rectified by the debit entry made later. The Rule or the notification does not provide the flexibility to the officers or the Tribunal to relax condition 2(h) of the notification. Refund rightly rejected - appeal dismissed - decided against appellant.
Issues Involved:
1. Rejection of refund claims due to non-debiting of CENVAT credit before filing the claim. 2. Adherence to statutory requirements under Rule 5 of the CENVAT Credit Rules and Notification No. 05/2006-CE (NT). Detailed Analysis: 1. Rejection of Refund Claims: The appellant, an exporter of Information Technology services, filed refund claims under Rule 5 of the CENVAT Credit Rules, 2004, for accumulated CENVAT credit. The claims were rejected by the Adjudicating Authority because the appellant did not debit the CENVAT credit amount from their books of accounts at the time of making the claim, as required. Additionally, the refund claim amount was not reflected in the Service Tax returns filed by the appellant during the relevant period. The appellant argued that the omission was due to a mistaken belief regarding the timing of the debit and subsequently revised their returns to rectify the mistake. 2. Adherence to Statutory Requirements: The appellant contended that the mistake of not debiting the amount in time was rectified subsequently and should not deprive them of the substantive benefit of the refund. They argued that the Commissioner (Appeals) should have taken a holistic view of the situation, considering that the appellant had surplus credit due to their export activities and did not gain anything by the technical mistake. The appellant cited several judgments to support their case, emphasizing that the Tribunal should appreciate the honest mistake and allow the refund. Tribunal's Findings: The Tribunal considered the arguments and perused the records. It emphasized that the roles of Legislature, Executive, and Judiciary are demarcated by the Constitution of India. The Tribunal's role is confined to interpreting and applying laws, not modifying them. The Tribunal referred to the Supreme Court's judgment in UOI vs Kirloskar Pneumatics Company, which clarified that authorities under the Act must act according to statutory provisions and cannot be directed to act contrary to the law. Rule 5 and Notification No. 05/2006-CE (NT): The Tribunal examined Rule 5 of the CENVAT Credit Rules and Notification No. 05/2006-CE (NT), which stipulate that the amount claimed as a refund must be debited at the time of making the claim. The appellant violated this condition by debiting the amount later. The Tribunal noted that the rule and notification do not provide flexibility to relax this condition. Conclusion: The Tribunal upheld the Order-in-Appeal, rejecting the appellant's argument that the mistake was merely technical and rectified later. It found that the appellant's cited case laws did not address the specific issue of not debiting the CENVAT credit before applying for a refund. Consequently, the Tribunal had no option but to uphold the rejection of the refund claims. Order: The appeal was rejected, and the order was pronounced on 14.06.2018 in open court.
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