2017 (12) TMI 77 - AT - Service Tax

Refund claim - respondent herein discharged the Service Tax liability twice once by debiting the amount in Cenvat Credit and second by way of cash deposit at the instance of Revenue authorities - It is the case of the respondent that the amount paid by cash by them on the instance of Revenue is uncalled for as during the period in question, there was no bar for utilisation of Cenvat Credit for discharge of Service Tax under reverse charge mechanism - Held that - the First Appellate Authority has correctly interpreted the law to hold that the Order in Original that rejects the refund claim of the respondent is incorrect - The provisions of Cenvat Credit Rules 2004, during the period in question in this case, do not provide or explicitly barred utilization of cenvat credit for discharge of Service Tax liability under the reverse charge mechanism. The said clause was introduced with effect from 2012 - appeal dismissed - decided against Revenue.

Summary

Issues involved: Eligibility for refund of Service Tax liability under reverse charge mechanism.

Analysis:
The appeal was filed by the Revenue against an order rejecting a refund claim. The respondent had discharged the Service Tax liability twice, once through Cenvat Credit and once by cash deposit as per Revenue authorities' instructions. The main issue was whether the respondent was entitled to a refund for the amount paid in cash. The First Appellate Authority favored the respondent, citing relevant decisions like Hero Honda Motors Ltd and others. The Revenue argued that the Authority erred in setting aside the original order without considering the taxation provisions for services provided from outside India and received in India. The consultant for the respondent referred to the Tribunal's decisions in similar cases to support their claim that Cenvat Credit could be utilized for Service Tax under reverse charge mechanism. The Tribunal found that during the relevant period, there was no explicit bar on using Cenvat Credit for such payments. The First Appellate Authority's interpretation was deemed correct, and the impugned order was upheld, rejecting the appeal and disposing of the case.