2021 (3) TMI 1006 - AT - Service Tax

100% EOU - refund of unutilized Cenvat credit - Rejection on the ground of non-compliance of para 2 (h) of the Notification No. 27/2012 C.E. (N.T.) dated 18.06.2012 - stand taken by the appellant is that though it had not debited the Cenvat credit ledger which was not maintained by it it had debited the same from its service tax ledger under the heading service tax receivable - HELD THAT - Going by the case record it is demonstratively established by the ld DR that an e-mail claiming such debit was sent to the adjudicating authority just two days prior to passing of the Orider-in-Original on dated 04.12.2015, which was not placed on record and learned Commissioner (Appeals) has clearly placed in his order at para 9 that he found no debit entry made in any of the ST-3 returns. More importantly on perusal of ST-3 return of 25.04.2014 also in page No. 41-42 of the Appeal Memo utilization of Cenvat credits for the period were shown as Zero in all its refund columns. More importantly on perusal of ST-3 return of 25.04.2014 also in page No. 41-42 of the Appeal Memo utilization of Cenvat credits for the period were shown as Zero in all its refund columns. In response to the submissions of Learned Authorised Representative it has also been conceded by the learned Counsel for the appellant that till the date of argument such debit was not made from the Cenvat credit ledger as not maintained by them. It can be said that the appellant has tried to tune the legal procedure to the point of no return in not preferring to make the necessary debit even on a future day thought Notification No. 27/2012 had made it obligatory to debit the same while filing refund application - appellant is not entitled to get the refund as claimed by it for non compliance of the procedure. Appeal dismissed - decided against appellant.

Summary

Issues:
Rejection of refund claims by 100% EOU under Rule 6 A of Service Tax Rules, 1994 for non-compliance of para 2 (h) of Notification No. 27/2012 C.E. (N.T.)

Analysis:
The appellant contested the rejection of refund claims, arguing that debiting the claim amount in the account should suffice as compliance with the notification. Reference was made to the doctrine of substantial compliance to avoid hardship for the assessee, citing relevant judicial decisions. However, the Respondent Department maintained that the exemption notification does not necessarily provide benefits to the assessee, emphasizing the lack of debiting Cenvat credit ledger as non-entitlement for refund benefits. The Tribunal considered both arguments.

The Tribunal noted that the appellant had not debited the Cenvat credit ledger, although they claimed to have debited it from the service tax ledger under a different heading. Evidence revealed that the appellant sent an email claiming the debit just before the Order-in-Original was passed, but no record was provided. The Commissioner (Appeals) found no debit entry in any ST-3 returns, and Cenvat credits were shown as "Zero" in refund columns. The appellant admitted to not debiting the Cenvat credit ledger, stating they would reverse it after adjudication. The Tribunal concluded that the appellant failed to comply with the necessary procedure, indicating a deliberate attempt to avoid making the required debit. Consequently, the appellant was deemed ineligible for the refund claimed.

In the final order, the Tribunal dismissed the appeal and upheld the decision of the Commissioner (Appeals) dated 23.04.2018, confirming the denial of the refund. The judgment was pronounced in open court on 23.03.2021.