2024 (4) TMI 965 - AT - Service Tax

Refund of CENVAT Credit - Discretion Power of the refund sanctioning authority - denial on the ground that improper description of the input services noted in the invoices of the Appellant/exporter of services - HELD THAT - On account of legal services availed as input services no invoices were raised showing the services as legal services and on the other hand copy of G.A.R.-7 Challan evidencing payment of Service Tax clearly indicates that the said payments were made under Business Auxiliary Services Cab Operators Services Sponsorship Services etc. This being the ground for refusal it is not to understood as to why the question of re-assessment is to come into play when such refusal is permissible well under Rule 9 of the CENVAT Credit Rules 2004. If particulars of description of goods or taxable service is not properly reflected in the duty paying document and that to the satisfaction of the Dy. Commissioner/Assistant Commissioner of Central Excise about its receipt and accounting for then the discretion lies with the refund sanctioning Authority namely the Deputy Commissioner or Assistant Commissioner of Central Excise to allow the CENVAT Credit or not and such discretion having been exercised judicially there are no irregularity on the part of Assistant Commissioner (Refunds-II) CGST Mumbai East in not allowing the same refund that got confirmed by the order of the Commissioner (Appeals). The order passed by the Commissioner of GST CX (Appeals-III) Mumbai in rejecting grant of refund to the Appellant on legal expenses is hereby confirmed - Appeal dismissed.

Summary

Issues involved: Denial of refund of CENVAT Credit u/s Rule 5 of the CENVAT Credit Rules, 2004 based on improper description of input services in invoices.

Summary:
The Appellant, engaged in providing 'Business Auxiliary Services' and 'Manpower Requirement and Supply Agency Services' to customers outside India, sought refund of CENVAT Credit for the quarter from January to March 2016. The refund was partially allowed but denied for an amount including payment proof of Service Tax on 'legal services'. The Appellant challenged this denial, citing legal precedents that unless an assessment order is reviewed, refund cannot be rejected. The Appellant argued that the invoices contained the necessary details, and any excess payment was adjusted. The Respondent supported the denial, stating that the excess amount paid earlier was shown as 'nil' in the returns. The Commissioner rejected the refund on legal services due to discrepancies in the description of services in the invoices and payment evidence. The Commissioner found that the payments were made under different categories like 'Business Auxiliary Services' and 'Sponsorship Services', not 'Legal Services'. The Commissioner's decision was upheld by the Tribunal, emphasizing the importance of proper description in duty paying documents for CENVAT Credit eligibility.

In conclusion, the appeal was dismissed, and the denial of refund on legal expenses was confirmed by the Tribunal.