2024 (1) TMI 730 - HC - Service Tax

Refund of the service tax paid on the input services that remained unutilized - consequence of the judgment, decree or direction by the appellate authority - requirement for fresh proceedings to be drawn up or not - Section 11B of CEA - HELD THAT - Section 11B(1) specifically provides for application for refund to be made within the stipulated period which admittedly in the instant case has been made by the petitioner and which is not disputed by the respondent as well. It is these applications which stood rejected by the respondent and it was further rejected by the Commissioner (Appeals) and which, finally stood set-aside by the Tribunal which decided the claim of refund in favor of the petitioner vide orders, dated 24.02.2020, 03.07.2017 and 24.10.2016 respectively. It goes without saying that once the application for refund which stood rejected by the competent authority under the statute has been set-aside and quashed by the appellate Tribunal, the orders of rejection would no longer remain in existence and as a consequence of the orders passed by the appellate Tribunal, the application for refund automatically becomes active and is liable to be processed from that stage itself without there being a necessity for moving a fresh application as has been contended by the learned counsel for the Department. The said contention of the Department therefore stands negated. The Writ Petition stands allowed.

Summary

Issues Involved:
1. Quashment of the impugned show cause notice.
2. Issuance of a Writ of Mandamus for refund of service tax.
3. Requirement of fresh application for refund under Section 11B of the Central Excise Act, 1944.
4. Compliance with appellate authority decisions.

Summary:

Quashment of the Impugned Show Cause Notice:
The petitioner filed a Writ Petition seeking the quashment of the impugned show cause notice dated 13.11.2023 issued by the respondent. The High Court agreed with the petitioner and quashed the show cause notice.

Issuance of a Writ of Mandamus for Refund of Service Tax:
The petitioner sought a Writ of Mandamus directing the respondent to grant refunds for various periods between 2009 and 2013. The Tribunal had previously allowed the refund claims, but the respondent had not processed these refunds. The High Court directed the respondent to process the refund applications immediately and make the payment within eight weeks.

Requirement of Fresh Application for Refund under Section 11B of the Central Excise Act, 1944:
The Department argued that a fresh application for refund was necessary under Clause (ec) of Section 11B of the Act. However, the High Court found this argument hard to accept. The Court held that once the Tribunal set aside the rejection of the refund applications, the initial applications became active again and did not require a fresh application.

Compliance with Appellate Authority Decisions:
The High Court emphasized the importance of compliance with appellate authority decisions, citing the Bombay High Court's decision in J.P. Morgan Services India Pvt. Ltd. Vs. Union of India. The Court reiterated that revenue officers are bound by the decisions of appellate authorities and must follow them unreservedly.

Conclusion:
The High Court allowed the Writ Petition, quashing the show cause notice and directing the respondent to process the refund applications immediately. The payment of the refund was to be made within eight weeks, and the petitioner could pursue interest on the refund amount in accordance with the law. The petition was allowed with no order as to costs, and any pending miscellaneous applications were closed.