2014 (11) TMI 664 - AT - Service Tax

Delay in sanctioning of refund - Numerous reasons for non sanction of refund - Held that - sanctioning authority is only gaining time to sanction the refund claim - Commissioner of the Service Tax, Pune in other proceedings against the applicant on the same issue has already sanctioned the refund claim to the applicants as per the decision of this Tribunal vide order dated 12.03.2013 and the Commissioner of the Service Tax, Mumbai is not following the same procedure in this case despite the appeal having been dismissed by this Tribunal, filed by the revenue. Therefore, it is observed by this Tribunal that there is no consistency in the view taken by the departmental officers. Moreover, in this case, there is clear direction to the concerned officer to dispose of the refund/rebate claim within one month. We also find that after the receipt of the order of this Tribunal on 16.09.2014, no steps were taken to implement the order of this Tribunal till 28.10.2014 and no explanation is given for that. In these circumstances, the conduct of the concerned official is not appreciated but in the interest of justice, the time of 15 days is granted to the learned Commissioner of Service Tax-III, Mumbai to dispose of the refund claim - Decided in favour of assessee.

Summary

Issues involved:
1. Implementation of Tribunal order for rebate/refund.
2. Delay in implementing the order by the Revenue.
3. Allegations of unjust enrichment and documentary evidence.
4. Lack of consistency in departmental officers' decisions.
5. Contempt of Court proceedings threat for non-compliance.

Issue 1: Implementation of Tribunal order for rebate/refund:
The applicant, Vodafone (I) Ltd., filed an application under Rule 41 of the CESTAT Procedure Rules, 1982 for implementing the Tribunal's order dated 14.07.2014. The Tribunal had dismissed the Revenue's stay petitions, emphasizing that granting a stay would amount to reviewing their own order, which is impermissible in law. The Revenue had filed an appeal, and the Tribunal directed the Asst. Commissioner to dispose of the refund/rebate claim within a month. However, the Revenue sought more time and was inconsistent in following the Tribunal's orders.

Issue 2: Delay in implementing the order by the Revenue:
The Revenue delayed implementing the Tribunal's orders despite clear directions, causing concern over the loss of interest to the exchequer. The learned Commissioner of Service Tax, Mumbai III, was accused of gaining time and not sanctioning the refund to the applicant promptly. The Tribunal observed a lack of consistency in the departmental officers' actions and granted 15 days to dispose of the refund claim, warning of contempt of Court proceedings for non-compliance.

Issue 3: Allegations of unjust enrichment and documentary evidence:
The issue of unjust enrichment was raised, focusing on the burden of proof regarding passing on the Service Tax incidence. The lower authorities had considered documentary evidence, including Chartered Accountant's certificates, invoices, and FIRCs, to support the refund claim. The applicant's counsel argued that all relevant documents were on record, and the delay in sanctioning the refund was unwarranted.

Issue 4: Lack of consistency in departmental officers' decisions:
The Tribunal noted a lack of consistency in the decisions of departmental officers, with the Commissioner of Service Tax, Pune, sanctioning the refund claim following the Tribunal's order, while the Commissioner of Service Tax, Mumbai, delayed the process. This inconsistency raised concerns about the department's adherence to Tribunal directives and procedural fairness.

Issue 5: Contempt of Court proceedings threat for non-compliance:
To ensure expeditious processing of the refund claim and payment of interest, the Tribunal warned of initiating contempt of Court proceedings against erring officials if the refund claim was not disposed of within the granted 15-day period. The Tribunal emphasized the importance of timely action to safeguard the interests of the general public and directed the order's copies to be sent to relevant authorities for consideration.

This detailed analysis covers the key issues and proceedings outlined in the judgment, highlighting the Tribunal's concerns regarding the delay in refund processing, allegations of unjust enrichment, and the need for consistent and timely action by departmental officers.