2025 (3) TMI 433 - AT - Service Tax

Refund of Service Tax paid - refund is denied only on the ground that there is no evidence to show whether Cenvat credit is availed by the KINFRA against the service tax paid by the appellant - HELD THAT - It is appropriate for this Tribunal to remand the matter to adjudication authority to reconsider the issue on de-novo adjudication by verifying the documents produced by the appellants regarding non-availment of Cenvat credit by KINFRA against the service tax paid by the appellants. Appellants are directed to produce certificate regarding non availment of Cenvat credit by KINFRA from authorized Chartered Accountant of KINFRA and on verification of the same adjudication Authority shall refund due amount with consequential relief if any in accordance with law. Appeals are allowed by way of remand - Adjudication Authority is directed to consider the claim within 3 months from the date of receipt of the document from the appellants regarding non availment of the CENVAT credit by the KINFRA.

Summary

The case before the Appellate Tribunal involved the issue of refund of Service Tax paid by the appellant to Kerala Industrial Infrastructure Development Corporation (KINFRA) while providing infrastructure for the development of industry. The key legal question was whether the appellant was entitled to a refund of the Service Tax based on a new section 104 inserted into the Finance Act 1994.The appellant submitted evidence that KINFRA had issued an invoice for the service provided along with the due amount of Service Tax while executing a long-term lease. Section 104 of the Finance Act, 1994, as amended in 2017, exempted State Government industrial development corporations or undertakings from levying Service Tax on one-time upfront amounts for long-term leases of industrial plots. The appellant claimed that they were not liable to pay any Service Tax and were entitled to a refund based on this provision.The Adjudication Authority and Appellate Authority rejected the refund claim citing lack of evidence regarding KINFRA's availing of the Cenvat credit for the Service Tax paid by the appellant. The appellant argued that they could provide documents proving non-availment of Cenvat credit by KINFRA. The Tribunal found that the refund was denied solely due to the lack of evidence on Cenvat credit availed by KINFRA and decided to remand the matter for reconsideration.The Tribunal directed the appellants to produce a certificate from an authorized Chartered Accountant of KINFRA regarding the non-availment of Cenvat credit. Upon verification of this certificate, the Adjudication Authority was instructed to refund the due amount with any consequential relief within three months.In conclusion, the Appeals were allowed by way of remand, and the Adjudication Authority was directed to reconsider the claim based on the evidence provided by the appellants regarding the non-availment of Cenvat credit by KINFRA.