2012 (6) TMI 143 - AT - Service Tax

Entitlement for refund of service tax prior to registration with the service tax department - Held that - High Court held in case of of mPortal India Wireless Solutions (P) Ltd. Vs. CST (2011 (9) TMI 450 (HC)) that in the absence of a statutory provision which prescribed that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund, authorities committed a serious error in rejecting the claim for refund on the ground which is not existence in law. By following the Karnataka judgement, Revenue s appeal is rejected.

Summary

Issues Involved:
Refund of service tax prior to registration with the service tax department.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Chennai concerned the entitlement of the respondents for a refund of service tax prior to their registration with the service tax department. The Commissioner (Appeals) had ruled in favor of the respondents based on precedents set by the Tribunal in previous cases. The Revenue, however, contested this decision, arguing that the Tribunal's decisions were not accepted by them, and they had filed an appeal against them before the High Court. It was noted that there was no stay on the operation of the Tribunal's decisions. Additionally, the Karnataka High Court had addressed a similar issue and held that there was no statutory provision mandating registration as a condition for claiming Cenvat credit. The High Court ruled that the rejection of the refund claim based on the absence of registration was a serious error and set aside the decision. Consequently, the Appellate Tribunal, following the Karnataka High Court's judgment, rejected the Revenue's appeal and disposed of the stay petition and appeal accordingly.

In conclusion, the Appellate Tribunal CESTAT, Chennai, based on the precedents and the ruling of the Karnataka High Court, rejected the Revenue's appeal regarding the refund of service tax prior to registration with the service tax department. The Tribunal emphasized that the absence of a statutory provision mandating registration as a condition for claiming refund rendered the rejection of the refund claim erroneous. The decision was made in alignment with the principles established by the Karnataka High Court, ultimately leading to the rejection of the Revenue's appeal.