2022 (11) TMI 751 - AT - Service Tax

Rejection of Refund claim - export of services - Business Support Services - alleged non-compliance of the Condition 2(h) of N/N. 27/2017-ST - Rule 5 of Cenvat Credit Rules read with Notification No. 27/2017-ST - HELD THAT - The debit of the amount of refund claim in the cenvat credit account (in ledger of the appellant) during the GST regime i.e. on or after 01.07.2017 is sufficient compliance of Condition 2(h) of the notification. In view of the observations of the Assessing Officer that the appellant have claimed refund less than the credit lying as on 30.06.2012, ipso facto established that they have not claimed more amount, and such amount has already been debited in the cenvat credit account in the ledger - It is further observed that there cannot be any more debit in the cenvat credit register on or after 01.07.2017 due to implementation of the GST regime. In these facts and circumstances, it is held that there is sufficient compliance of condition 2(h) of the Notification No. 27/2012-CE(NT). The Adjudicating Authority is directed to grant the refund alongwith interest to the appellant within a period of 60 days from receipt of copy of this order - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
- Rejection of refund claimed by appellant-assessee under Rule 5 of Cenvat Credit Rules read with Notification No. 27/2017-ST for alleged non-compliance of Condition 2(h) of the Notification.

Analysis:
1. Facts of the Case: The appellant, an exporter of services, applied for refunds totaling Rs. 18,76,999 under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 27/2017-CE(NT) on various dates. The refund claims were rejected due to alleged non-compliance with Condition 2(h) of the Notification, specifically related to the details of cenvat credit reversal.

2. Appeal and Rejection: The appellant appealed the rejection before the Commissioner (Appeals) who upheld the rejection. The appellant then appealed to the Tribunal, arguing that the rejection was unjust as they had debited the amount claimed as refund in their cenvat credit account ledger, despite the redundancy of the cenvat credit register post-GST implementation.

3. Contentions: The appellant contended that the rejection based on non-debit in the cenvat register and non-reflection in ST-3 return was unjust as they had debited the amount in their ledger. They argued that due to GST implementation, the balance of cenvat credit became unusable, leading to automatic reversal of the closing balance as of 30.06.2017.

4. Tribunal's Decision: The Tribunal analyzed the submissions and held that debiting the refund amount in the cenvat credit account ledger during the GST regime sufficed as compliance with Condition 2(h) of the Notification. The Tribunal noted that the appellant had claimed less than the credit balance as of 30.06.2017, indicating compliance. As no further debits were possible post-GST implementation, the Tribunal found the rejection unjust and allowed the appeal, directing the refund with interest within 60 days.

5. Conclusion: The Tribunal's decision emphasized that the appellant's ledger debit constituted compliance, considering the unique circumstances post-GST implementation. The ruling highlighted the practical challenges faced by businesses transitioning under GST and ensured fair treatment in refund matters, ultimately allowing the appeal and granting the refund to the appellant.