2017 (10) TMI 510 - AT - Service Tax

Refund claim - Rule 5 of CCR, 2004 - denial on the ground that In Service Tax Returns, the Cenvat credit column was shown as Nil , therefore, verification of refund claim is not possible - Held that - refund claim cannot be denied on the ground that the Cenvat credit has not shown in their ST-3 returns - reliance placed in the case of Broadcom India Research Pvt. Ltd. Versus Commr. of S.T., Bangalore 2015 (6) TMI 1030 - CESTAT BANGALORE - on the ground that the appellant has not shown Cenvat credit in their ST-3 returns, cannot be the ground to deny refund to the appellant - refund allowed. Refund claim - denial on the ground that FIRC submitted by the appellants have no co-relation with the invoices - Held that - initially the appellant were known as M/s Hemscott India Pvt. Ltd. and with effect from 19.3.2008, the name of the appellant company has been changed to the present name. As the invoices were issued in the earlier name of the company and whereas the some payments were received the new name of the company. In that circumstances, it cannot be held that FIRC are not co relatable - the matter needs examination at the end of the adjudicating authority for correlation of the invoices issued and payment received by them - matter on remand. Refund claim - denial on the ground that Invoices are not addressed to the registered premise of the appellant and invoices were not issued in the name of the appellant - Held that - it is not disputed that these services has not been used by the appellant and have not paid service tax thereon - the appellant is entitled to the refund claim on these services as they have availed Cenvat credit on this. Moreover, the appellant has availed central registration to rectify the said mistake subsequent to the impugned period, in that circumstances, the refund claim cannot be denied on that reasons - refund allowed. Appeal allowed in part and part matter on remand.

Summary

Issues:
Refund denial under Rule 5 of Cenvat Credit Rules, 2004: (1) Non-tallying Cenvat credit in Service Tax Returns, (2) Input services received but no output service provided, (3) Lack of correlation between FIRC and invoices, (4) Invoices not addressed to registered premise, (5) Invoices not in the name of the appellant.

Analysis:
1. The appellant appealed against the denial of refund under Rule 5 of Cenvat Credit Rules, 2004 citing various reasons. The Tribunal noted that while the appellant had complied with the conditions for refund, the claims were rejected based on discrepancies in the documentation.

2. The Tribunal referred to previous judgments to establish that the refund claim cannot be denied solely based on discrepancies in the ST-3 returns. It emphasized the importance of relevant documents, nature of service, and utilization for rendering output service in determining refund eligibility, irrespective of errors in returns.

3. The Tribunal highlighted the case of Serco Global Services Pvt. Ltd. where it was clarified that refund should be granted based on the Cenvat credit available in the account, not the closing balance in ST-3 returns. The importance of revised returns and the procedural aspect of rectifiable mistakes were emphasized.

4. The Tribunal further discussed the necessity of a quasi-judicial process involving show cause notices for disallowing Cenvat credit, which was not followed in the present case. It referenced cases where adjustments of refund claims in other cases were deemed unsustainable without proper procedures.

5. Addressing specific issues raised by the appellant, the Tribunal ruled that the non-tallying of Cenvat credit in ST-3 returns cannot be a sole reason to deny the refund. It directed the matter to be re-examined by the adjudicating authority for correlation of services provided and payments received to determine refund eligibility.

6. The Tribunal acknowledged the appellant's name change and payment discrepancies, emphasizing the need for correlation between invoices and payments. It concluded that the appellant should be entitled to the refund claim if services were utilized and Cenvat credit was availed, despite initial errors in documentation.

7. Consequently, the Tribunal remanded the matter to the adjudicating authority for further examination and correlation of services and payments to ascertain the appellant's entitlement to the refund claim. The appeal was disposed of with these terms.