2019 (4) TMI 1563 - AT - Service Tax

Refund of service tax - rejection on the ground of time limitation - HELD THAT - Once the impugned orders confirming the demand have been set aside by the Tribunal in toto, the Lower Authorities cannot reexamine the same and cannot hold that part of the demand falling within the limitation period has to be confirmed and as such, is not required to be refunded. This is a clear contempt of the Tribunal s order. If the Revenue was of the view that the said order of the Tribunal is not correct, it was open to them to file an appeal their against before the higher Appellate Forum. There is no ambiguity in the said order of the Tribunal which in very clear terms has held in favour of the assessee and has set aside the order confirming the demand against the assessee - Impugned order set aside - appeal allowed - decided in favor of appeal.

Summary

Issues:
1. Refund claim denial based on limitation period
2. Interpretation of Tribunal's order and subsequent proceedings

Issue 1: Refund claim denial based on limitation period:
The case involved the appellant engaged in software development and export, facing service tax recovery proceedings. The original adjudicating authority and Commissioner (Appeals) confirmed a demand of ?14,27,649 against the appellant. However, on appeal, the Tribunal set aside the orders due to a limitation issue. Subsequently, the appellant filed a refund application for the amount deposited. The Assistant Commissioner of Service Tax partially allowed the refund claim but confirmed the balance demand within the limitation period. The Adjudicating Authority rejected the proportionate refund claim based on the Tribunal's decision regarding limitation. The Commissioner (Appeals) upheld this rejection, leading to the present appeal challenging the denial of the refund claim within the limitation period.

Issue 2: Interpretation of Tribunal's order and subsequent proceedings:
The Tribunal's order set aside the entire demand against the appellant, emphasizing that the show cause notice invoking the proviso to Section 73 of the Finance Act, 1994, was unsustainable due to the lack of establishing intention to evade service tax. The Tribunal's decision rendered the show cause notice and subsequent proceedings unsustainable, leading to the appeal's allowance with consequential relief. The Lower Authorities, despite the Tribunal's clear order, attempted to confirm a part of the demand within the limitation period, which was deemed a contempt of the Tribunal's decision. The Tribunal's order was held as final, and the Lower Authorities were criticized for misinterpreting and not following the Tribunal's directive. The judgment highlighted that the Lower Authorities had no justification for their actions and set aside the impugned orders, allowing both appeals with consequential relief to the appellant.

In conclusion, the judgment addressed the denial of a refund claim based on the limitation period and the misinterpretation of the Tribunal's order by the Lower Authorities. The Tribunal's clear decision to set aside the demand in its entirety was emphasized, and the Lower Authorities were criticized for not adhering to the Tribunal's directive. The judgment ultimately allowed both appeals and provided consequential relief to the appellant.