2024 (9) TMI 1302 - AT - Service Tax

Sanction of rebate (by way of refund) of CENVAT credit of Service Tax paid on input services - N/N. 41 of 2012 ST dated 29.06.2012 - HELD THAT - The reading of Section 142 (4) of the CGST Act is clearly reflective of the fact that refund of the tax paid on input or input services under the existing law pertaining to export of goods and services prior to appointed day would be covered by the provision of existing law. It is also noted that the concerned question of law is no more resintegra and is squarely covered and had come to be considered in Vinod Kumar Diamond India Pvt Ltd 2023 (5) TMI 762 - CESTAT MUMBAI . Further, in the case of Fine Automotive and Industrial Radiators Pvt Ltd. vs. Commissioner of GST and Central Excise 2019 (11) TMI 1408 - CESTAT CHENNAI , permitted the refund of service tax in similar circumstances. The appellant is entitled to the refund of the service tax paid in the present case. The impugned order is set aside - appeal allowed.

Summary

Issues:
Sanction of rebate (by way of refund) of CENVAT credit of Service Tax paid on input services.

Analysis:
The appellant filed appeals against the Order-In-Appeal setting aside the Order-In-Original sanctioning a refund amount. The key issue was the sanction of rebate of CENVAT credit of Service Tax paid on input services. The appellant availed technical inspection and certification services for export of cut and polished diamonds. The appellant contended entitlement to rebate under Notification No. 41 of 2012. The adjudicating authority initially allowed the rebate claim, but the Commissioner (Appeals) held that post-GST introduction, provisions for refund of service tax were repealed, making the notification inapplicable to goods exported under the GST regime.

The appellate authority's findings were deemed inconsistent with existing law and a CBIC circular. Section 142(4) of the CGST Act was pivotal, stating that refund claims for goods or services exported before or after the appointed day must be handled in accordance with existing law. This provision indicated that tax paid on input services for exports under the old law should be covered by the existing law.

The judgment referenced previous cases like Vinod Kumar Diamond India Pvt Ltd and Fine Automotive and Industrial Radiators Pvt Ltd., where refund of service tax in similar circumstances was permitted. The conclusion was that the appellant was entitled to the refund of service tax paid. The impugned order was set aside, and the appeal was allowed with any consequential benefits as per the law.