2019 (3) TMI 1323 - AT - Service Tax

Refund of unutilized CENVAT Credit - rejection on the ground that the claimants have not debited the amount claimed as refund from their CENVAT credit account at the time of making the claim and the FIRCs have not been furnished for the relevant period - Held that - It was held in the case of SANDOZ PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, BELAPUR 2015 (10) TMI 882 - CESTAT MUMBAI , where it was held that the condition in question is not such that it could debar the appellant from claiming the refund. Thus, the appellant is eligible for claiming the refund - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Refund claim rejection under Notification No. 27/2012-CE (NT) for unutilized credit.
2. Interpretation of exemption notification for availing benefits.
3. Debiting amount claimed from Cenvat credit account at the time of making the claim.
4. Repeal of Finance Act, 1994 and Service Tax Rules by GST provisions affecting refund claim process.

Analysis:
1. The appellant filed a refund claim under "Business Auxiliary Service" for unutilized credit under Notification No. 27/2012-CE (NT) from October to December 2014. The Assistant Commissioner rejected the claim for not debiting the amount claimed from the Cenvat credit account and not furnishing FIRCs. The first appellate authority upheld this decision citing strict construction of exemption notification for availing benefits.

2. During the hearing, the appellant's counsel argued that the refund claim was filed after the repeal of the Finance Act, 1994 and Service Tax Rules by GST provisions. The counsel contended that the Notification only required the amount claimed to be reversed at the time of filing the claim, not necessarily reflected in the ST-3 return. Previous tribunal decisions and Commissioner's rulings were cited to support the appellant's contention.

3. The Revenue supported the lower authorities' findings, emphasizing the appellant's non-compliance with the conditions stipulated under Notification No. 27/2012-CE (NT). The Revenue argued that the rejection of the refund claim by the first appellate authority was legal and proper.

4. The Member (Judicial) analyzed the Commissioner's decision in a similar case and previous tribunal rulings. It was noted that as long as the availability and eligibility of credits were not disputed, mere debiting of the amounts claimed as refund in the quarter itself, not while making the claim, should not be a reason to reject the claim. The Member concluded that the appellant was eligible for the refund and set aside the impugned order, allowing the appeal with consequential benefits as per law.