2021 (10) TMI 1231 - AT - Service Tax

Refund of unutilized/accumulated CENVAT credit on input services - N/N. 27/2012 ibid - HELD THAT - The Orders-in-Originals are speaking orders, inasmuch as the adjudicating authority has considered the conditions laid down under the governing Notification No. 27/2012 ibid and has also analysed the applicability of para 2(h) of said Notification ibid has also noted the change in law with the introduction of GST Act, 2017 whereby, the filing of ER-3 return was done away with. I find that the reasonings given by the adjudicating authority are quite logical and well-founded. It is also well settled that the introduction of a new law cannot be held to deprive the rights of a Taxpayer, especially when the tax payers money lies with the Revenue. In the impugned order, the Commissioner (Appeals) has only upheld the Department s contention that the refund sanctioned was not legal and proper, but has not whispered any reasons to arrive at such a conclusion. The Commissioner (Appeals) has only extracted the findings of the adjudicating authority to hold that the sanctioning order was not legal and proper, which is nothing but baseless, arbitrary hence, the same cannot be sustained in the eye of law. The appellant is entitled for the refunds - Appeal allowed - decided in favor of appellant.

Summary

Issues: Appeal against the order of Commissioner of Central Tax (Appeals-II) regarding refund claim of unutilized/accumulated cenvat credit on input services used in manufacturing final product.

Analysis:
The appellant filed a refund claim under Rule 5 of Cenvat Credit Rules, 2005, seeking refund of unutilized/accumulated cenvat credit on input services used in manufacturing their final product. The adjudicating authority partially sanctioned the refund after confirming the conditions of export of goods, noting the appellant's status as a 100% EOU, and acknowledging compliance with Notification No. 27/2012. However, the First Appellate Authority allowed the Revenue's appeal, setting aside the refunds granted. The appeals before the forum challenged this decision for common disposal due to a common issue across all appeals.

During the hearing, the forum considered the lower authorities' orders, decisions cited during arguments, and found the Orders-in-Original to be comprehensive. The adjudicating authority analyzed the conditions of Notification No. 27/2012, para 2(h) of the same, and the impact of the GST Act, 2017. It was noted that the appellant debited the cenvat refund amount manually during the refund claim filing, aligning with the requirements of the notification. The introduction of new laws should not deprive taxpayers of their rights, especially when their money is with the Revenue.

The Commissioner (Appeals) upheld the Department's contention that the sanctioned refund was not legal and proper without providing substantial reasons for this conclusion. The forum found support in previous orders of the same Bench in similar cases, establishing that the appellant was entitled to the refunds as correctly sanctioned by the adjudicating authority. Consequently, the impugned orders were set aside, and the appeals were allowed with any consequential benefits as per the law. The order was pronounced in open court on 28/10/2021.