2019 (7) TMI 1300 - AT - Service Tax

100% EOU - refund of CENVAT Credit - input services - pre-publication services and related services for books and journals - reverse charge mechanism - HELD THAT - The decision of the Hon ble High Court of Judicature at Madras in the case of M/s. 3E Infotech 2018 (7) TMI 276 - MADRAS HIGH COURT comes to the rescue of the appellant despite the fact that there was no application for condonation of delay and despite the fact that the so-called advice was not even an obiter. This is because the refund accrued to the assessee-appellant by virtue of its export and not as a consequence of an order of the Tribunal. The impugned order and the rejection cannot sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Partial refund rejection under CENVAT Credit Rules, 2004.
2. Refund claim rejection based on time limitation.
3. Application for refund after re-credit and its validity.
4. Interpretation of Section 11B of the Central Excise Act, 1944.

Issue 1: Partial refund rejection under CENVAT Credit Rules, 2004
The appellant, a 100% EOU providing pre-publication services, filed a refund claim under Rule 5 of the CENVAT Credit Rules, 2004. The Adjudicating Authority sanctioned only a partial refund and rejected the balance amount paid under reverse charge mechanism. The First Appellate Authority and the Tribunal also rejected the appeal against the partial rejection.

Issue 2: Refund claim rejection based on time limitation
The appellant, after taking re-credit of the disputed amount, filed a separate refund application. The Adjudicating Authority sanctioned the refund, but the Commissioner (Appeals) rejected it, citing Section 11B of the Central Excise Act, 1944, stating that the application was not made within one year. The appellant relied on various decisions to support their claim that a refund claim cannot be barred by limitation if service tax is paid by mistake.

Issue 3: Application for refund after re-credit and its validity
The appellant's consultant argued that the refund accrued due to export and not as a consequence of the Tribunal's order. Despite no application for condonation of delay, the Hon'ble High Court's decision in a similar case supported the appellant's claim for refund even without an explicit order from the Tribunal.

Issue 4: Interpretation of Section 11B of the Central Excise Act, 1944
The Hon'ble High Court's decision emphasized that a claim for refund cannot be barred by limitation if service tax is paid by mistake, contrary to the Revenue's stance. The Tribunal's orders cited by the Revenue were considered but overridden by the binding decision of the Hon'ble jurisdictional High Court, leading to the allowance of the appeal and the direction for authorities to consider the refund as per the High Court's directions.

This comprehensive analysis of the judgment highlights the key issues involved and the detailed reasoning provided by the Tribunal in addressing each issue raised during the proceedings.