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2018 (8) TMI 601 - AT - Service TaxRefund of service tax paid - Rule 5B of the CENVAT Credit Rules, 2004 - rejection on the ground that the respondent being a recipient of taxable service and not a service provider, the provisions of Rule 5B of the rules read with N/N. 12/2014-Central Excise (N.T.) dated 03.03.2014 are not applicable and accordingly, refund application is not maintainable - Held that - It is an admitted fact on record that the respondent does not provide any taxable service and is also not registered with the Service Tax department for providing any taxable service. However, the respondent is registered with the department for payment of service tax on the taxable services received by it and discharged the service tax liability on reverse charge mechanism, as provided under sub-section (2) of Section 68 of the Finance Act, 1994. Since the respondent discharged the service tax liability in the capacity of recipient of service, Rule 5B should be equated with Rule 5 of the rules, for grant of refund of service tax paid on the taxable services. This Tribunal in the case of United News of India v. Commissioner of Service Tax, New Delhi 2017 (3) TMI 17 - CESTAT NEW DELHI has held that when the recipient pays service tax on receiving the taxable service, the provisions of section 66 of the Act pari-materia with Section 68(2) should be available for claim of the benefit contained in the N/N. 17/2004-ST dated 10.09.2004. Appeal dismissed - decided against Revenue.
Issues:
Refund claim under Rule 5B of CENVAT Credit Rules, 2004 - Applicability of Rule 5B to recipient of taxable service - Interpretation of Section 68(2) of the Finance Act, 1994 - Benefit of exemption under Notification No. 17/2004-ST dated 10.09.2004 for recipient of service - Precedential value of previous Tribunal decisions. Analysis: The case involved a dispute regarding a refund claim under Rule 5B of the CENVAT Credit Rules, 2004, by a respondent engaged in manufacturing and registered for service tax on taxable services received. The original authority rejected the refund application, stating that Rule 5B did not apply to recipients of taxable services. However, the Commissioner (Appeals) allowed the appeal, granting the refund benefit, as the services were used for export. The Tribunal analyzed the legal framework, including Section 68(2) of the Finance Act, 1994, which deals with reverse charge mechanism for service tax payment by recipients. The Tribunal referenced previous decisions, such as United News of India v. Commr. Of Service Tax, New Delhi, to support the interpretation that the recipient's liability to pay service tax entitles them to claim benefits like the exemption under Notification No. 17/2004-ST. The Tribunal emphasized that when a recipient pays service tax under reverse charge mechanism, the provisions of Section 68(2) should allow for benefits like exemptions. It cited the case of CCE & S.T., Indore v. Cummins Technologies India Ltd. to illustrate how legal fictions created by the law should not limit the recipient's entitlement to such benefits. The Tribunal clarified that the recipient's obligation under Section 66A extends to claiming benefits under relevant notifications, rejecting any narrow interpretation that excludes refund claims. Regarding the precedential value of previous Tribunal decisions, the Tribunal noted that the decision relied upon by the Revenue did not address the specific issue of liability for service tax payment by the recipient and its implications for refund claims. As parties did not raise these points in that case, it could not set a binding precedent. Consequently, the Tribunal upheld the Commissioner (Appeals)'s decision, dismissing the Revenue's appeal and disposing of the respondent's cross objection. In conclusion, the Tribunal's analysis centered on the recipient's entitlement to refund benefits under Rule 5B, interpreting relevant provisions of the Finance Act and past decisions to support the respondent's position. The judgment clarified the applicability of exemptions to recipients under the reverse charge mechanism, emphasizing the legal obligations and rights of service tax recipients in claiming such benefits.
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