2016 (3) TMI 954 - AT - Service Tax

Eligibility of refund for the period April, 2009 to September, 2009 - Service Tax paid on input services and used for providing output service which are exported under the category of Information Technology Software Services - Refund claim of ₹ 8,42,760/- allowed and refund claim of ₹ 8,03,031/- rejected as services were received prior to output service being notified but first appellate authority after following due process rejected the allowed claim also - Held that - the first appellate authority was in error in rejecting or setting aside refund of ₹ 8,42,760/- sanctioned by the adjudicating authority. Against sanctioning of refund claim of such an amount there was no appeal from Revenue, hence the first appellate authority cannot suo moto set aside the order sanctioning refund of ₹ 8,42,760/-. As regards the refund claim of ₹ 8,03,031/-, the issue is no more res integra. By relying on the judgment of Hon ble High Court in the case of mPortal India Wireless Solutions P. Ltd. Vs. C.S.T., Bangalore 2011 (9) TMI 450 - KARNATAKA HIGH COURT , the appellant is eligible for the refund claim. - Decided in favour of appellant with consequential relief

Summary

Issues:
1. Eligibility for refund of Service Tax paid on input services used for providing exported output services.
2. Rejection of refund claim by the first appellate authority.
3. Applicability of a judgment by the High Court of Karnataka in a similar case.

Analysis:

Issue 1:
The primary issue in this case is whether the appellant is entitled to a refund of an amount due to Service Tax paid on input services utilized for providing exported output services in the category of "Information Technology Software Services." The adjudicating authority allowed a partial refund and rejected a portion based on the timing of service receipt in relation to the notification of output services. The first appellate authority rejected the appeal against the refund rejection. The appellant contested the rejection, citing a High Court judgment supporting their claim for the refund amount.

Issue 2:
The second issue pertains to the rejection of the refund claim by the first appellate authority. The counsel for the appellant argued that the rejection of a specific amount was erroneous as it was not contested by either party, and there was no appeal from the Revenue against it. The Tribunal found that the first appellate authority erred in setting aside the refund without any appeal from the Revenue, thereby allowing the refund of the contested amount.

Issue 3:
The third issue involves the applicability of a judgment by the High Court of Karnataka in a similar case to the present matter. The appellant relied on this judgment to support their claim for the refund of a specific amount. The Tribunal analyzed the judgment and found that the appellant, being an export-oriented unit, was entitled to the refund of the CENVAT credit accumulated, even though the export of software was not a taxable service at the relevant time. The Tribunal held that the impugned order was unsustainable and set it aside, allowing the appeal with consequential relief to the appellant.

In conclusion, the Tribunal upheld the appellant's claim for the refund of the contested amount and set aside the impugned order, citing the applicability of the High Court judgment and the entitlement of the appellant to the CENVAT credit refund.