2024 (5) TMI 1501 - AT - Service Tax

Refund of service tax paid on ocean freight in terms of Section 142 (3) of CGST Act, 2017 - refund was rejected on the ground that the amount of service tax paid on the ocean freight is after 01.07.2017 when cenvat credit was not admissible - HELD THAT - Even though the appellant have paid the service tax after 01.07.2017 but the same pertains to the period prior to 01.07.2017 when the service tax paid on ocean freight was admissible as cenvat credit. Since the appellant is unable to take the credit after 01.07.2017, the mechanism of refund of such paid amount is provided under Section 142(3) of CGST Ac, 2017 and on the very same issue that if the amount paid after 01.07.217 whether the same is admissible for cenvat credit for the period prior to 01.07.2017 has been settled in various judgments cited by the appellant. Accordingly, the appellant is prima facie eligible for refund of cenvat credit on ocean freight. The impugned order is set aside - Appeal is allowed by way of remand to the Adjudicating Authority.

Summary

In the case before the Appellate Tribunal CESTAT Ahmedabad, the issue was whether the appellant was entitled to a refund of service tax paid on ocean freight as a refund of CENVAT credit under Section 142(3) of the CGST Act, 2017. The Learned Commissioner (Appeals) had denied the refund, reasoning that since the service tax was paid after 01.07.2017, during the GST regime, no CENVAT credit was possible, and thus no refund could be granted.

The appellant's counsel, Shri Devashish Trivedi, argued that the refund should not be rejected merely because the payment occurred after 01.07.2017. He cited several judgments supporting the claim that service tax paid for periods before 01.07.2017, even if paid later, should be eligible for CENVAT credit.

Shri R.R. Kurup, representing the Revenue, supported the findings of the impugned order. However, the Tribunal, led by Hon'ble Member (Judicial) Mr. Ramesh Nair, found that the service tax related to a period when such tax was admissible as CENVAT credit. Therefore, under Section 142(3) of the CGST Act, 2017, the appellant is "prima facie eligible for refund of CENVAT credit on ocean freight." The Tribunal set aside the impugned order and remanded the matter to the Adjudicating Authority for reconsideration, emphasizing that the refund process must undergo close scrutiny on various facts. The decision was pronounced in open court on 14.05.2024.