2021 (3) TMI 1117 - AT - Service Tax

Refund in cash - Proper authority to decide the issue - Section 142 (6) (a) of CGST Act 2017 - HELD THAT - Admittedly, the issue is refund claimed under Section 142 (6) (a) of CGST Act, but I cannot go into that since CESTAT is not authorised to decide issues under CGST Act, 2017, as per appellant s request. The only possible order is to set aside the impugned order and remand the matter back to the file of the adjudicating authority, who shall pass a final order, in accordance with law, after affording reasonable opportunity to the appellant leaving all contentions open. Appeal allowed by way of refund.

Summary

Issues:
Appeal against rejection of refund claim under Section 142 (6) (a) of CGST Act 2017.

Analysis:
The appellant filed an appeal against the rejection of their refund claim by the Commissioner (Appeals). The appellant had paid provisions towards royalty and trademark fee during the financial year 2010-11 without awareness of the applicability of service tax on these payments. A Show Cause Notice was issued by the Revenue proposing to impose penalties under Sections 76 & 78 of the Finance Act, 1994. The Order-in-Original passed confirmed the proposals made in the SCN. The appellant then filed an application for refund under Section 142 (6)(a) of the CGST Act, which was denied by the original authority and upheld by the Commissioner (Appeals).

The appellant argued that they had sought permission from the original authority to take credit on the service tax paid, which was recorded in the Order-in-Original. The Commissioner (Appeals) had observed that the appellant, under the reverse charge mechanism, was entitled to take cenvat credit as no intent to evade service tax was proven. The appellant contended that the denial of the refund was erroneous and relied on Section 142 (6) (a) to claim entitlement to cash refund of cenvat credit.

The learned DR supported the findings of the lower authorities, but the Tribunal disagreed. The Tribunal noted that the order of the Commissioner (Appeals) in the first round had been accepted by both the Revenue and the assessee without further appeal, rendering the clarification in the impugned order irrelevant. The Tribunal also referenced decisions of the Hon'ble Supreme Court to support the appellant's entitlement to cenvat credit. The Tribunal set aside the impugned order and remanded the matter back to the adjudicating authority for a final order, emphasizing that the appellant's claim for cenvat credit had been consistent and should not be denied based on technicalities.

In conclusion, the Tribunal disposed of the appeal by setting aside the impugned order and remanding the matter for a fresh decision by the adjudicating authority, ensuring the appellant is given a reasonable opportunity to present their case.