2020 (2) TMI 1012 - AT - Service Tax

SEZ unit - Refund of CENVAT Credit - whether appellant is entitled to refund being in relation to cenvat credit for input services received during the quarter April, 2016 to June, 2016? - HELD THAT - The facts in this period under dispute are similar to the facts in the earlier two preceding quarters, which have already been decided by the learned Commissioner (Appeals) - the finding of the ld. Commissioner (Appeals) in the appeal for the preceding period, is correct. Accordingly, this appeal is allowed, the impugned order is set aside to the extent of disallowance of refund, the appellant is held eligible to refund - Decided in favor of appellant.

Summary

Issues:
1. Entitlement to refund of cenvat credit for input services received during a specific quarter.
2. Discrepancy in service tax payment and registration details for a SEZ unit.
3. Admissibility of refund claim for a SEZ unit under specific provisions.

Analysis:
1. The primary issue in this appeal before the Appellate Tribunal CESTAT NEW DELHI was whether the SEZ unit is entitled to a refund of cenvat credit for input services received during the quarter April, 2016 to June, 2016. The appellant, a company engaged in processing, manufacturing, and retailing of gemstone and jewelry products, had filed a refund claim for &8377; 6,17,912/-, which was partially disallowed by the Revenue. The dispute arose as the services were received prior to the SEZ unit's registration date with the Service Tax Department, leading to the rejection of a significant amount of the refund claim.

2. Another crucial issue highlighted in the judgment was the discrepancy in service tax payment and registration details for the SEZ unit. The Revenue contended that the appellant had paid service tax under a different registration number and address, not corresponding to the SEZ unit's particulars. This discrepancy raised concerns regarding the eligibility of the SEZ unit for the refund claim under the relevant provisions of the Central Excise Act and the Finance Act. The adjudication process resulted in the disallowance of a substantial portion of the refund claim by the Revenue.

3. The analysis further delved into the admissibility of the refund claim for the SEZ unit under specific provisions. The appellant's counsel argued that similar issues had arisen in previous quarters, where refund claims were rejected on comparable grounds. However, the Commissioner (Appeals) in a previous appeal had acknowledged the interconnection between various units of the appellant company and the payment of service tax under a different registration number. The Commissioner had emphasized that the appellant units were essentially the same entity, leading to a favorable decision on the refund claim.

4. Upon considering the arguments presented by both parties, the Tribunal found that the facts in the disputed period aligned with those of the preceding quarters, where similar issues had been addressed. The Tribunal concurred with the Commissioner (Appeals) regarding the correctness of the findings in the earlier appeal and allowed the current appeal. The impugned order disallowing the refund was set aside, and the appellant was deemed eligible for the refund, which was to be granted within sixty days along with applicable interest as per rules.

In conclusion, the judgment resolved the issues surrounding the entitlement to a refund of cenvat credit, discrepancies in service tax payment details, and the admissibility of the refund claim for the SEZ unit, ultimately ruling in favor of the appellant based on previous decisions and the interconnected nature of the appellant's units.