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2024 (4) TMI 299 - AT - Service TaxRefund of service tax paid on input services used for export of goods - rejection of refund claim observing that the exports have happened prior to 06.10.2007 (the date of notification) and therefore the appellant is not eligible for refund - period from 01.10.2007 to 02.04.2008 - N/N. 41/2007 dated 06.10.2007 - HELD THAT - When the Department has not filed any appeal it is indeed acceptance of the order of the Tribunal. The Department then cannot deviate such acceptance on the basis of merits or monetary grounds. The refund has to be sanctioned to the appellant. The ligation policy put forward in every Budget is to reduce the litigation and to lessen the burden of public exchequer on litigations. This being the intention of the litigation policy the department has readjudicated the matter and again put further rounds of litigations. These situations should not be allowed to recur or continue. It appears that the adjudicating authority has not understood para-2 of the CBEC instructions dt. 12.12.2013 issued in regard to litigation policy. It does not mean that the decision of the Tribunal can be flouted or refused to be given effect to. When not appealed by either side the order passed by Tribunal is final. The department cannot sit in appeal on an order passed by the Tribunal. The Hon ble Apex Court in the case of UNION OF INDIA VERSUS KAMLAKSHI FINANCE CORPORATION LTD. 1991 (9) TMI 72 - SUPREME COURT held that The position now therefore is that if any order passed by an Assistant Collector or Collector is adverse to the interests of the Revenue the immediately higher administrative authority has the power to have the matter satisfactorily resolved by taking up the issue to the Appellate Collector or the Appellate Tribunal as the case may be. In the light of these amended provisions there can be no justification for any Assistant Collector or Collector refusing to follow the order of the Appellate Collector or the Appellate Tribunal as the case may be even where he may have some reservations on its correctness. The Hon ble Rajasthan High Court in the case of BHARAT SANCHAR NIGAM LTD. VERSUS HE PRINCIPAL COMMISSIONER CENTRAL GOODS AND SERVICE TAX COMMISSIONERATE COMMISSIONERATE-JAIPUR ASSISTANT COMMISSIONER CENTRAL GOODS AND SERVICE TAX COMMISSIONERATE CENTRAL EXCISE BUILDING SECRETARY MINISTRY OF FINANCE-DEPARTMENT OF REVENUE-GOVERNMENT OF INDIA 2022 (3) TMI 330 - RAJASTHAN HIGH COURT held that when the entire order in original is set aside by Tribunal the department cannot give limited effect to Tribunal s order restricting it to one demand only. The impugned order is set aside - appeal allowed.
Issues Involved:
1. Eligibility for refund of service tax paid on input services used for export of goods. 2. Applicability of limitation period for refund claims. 3. Consideration of Cenvat credit for refund eligibility. 4. Compliance with Tribunal's orders by adjudicating authorities. Summary: Issue 1: Eligibility for Refund of Service Tax Paid on Input Services Used for Export of Goods The appellant, an exporter of leather goods, paid service tax on sales commission to agents outside India under reverse charge basis as per Section 66A of the Finance Act, 1994. They claimed a refund of the service tax paid under Notification No.41/2007 dated 06.10.2007. The department initially rejected the refund claim, stating that the exports occurred before the notification date, making the appellant ineligible for the refund. Issue 2: Applicability of Limitation Period for Refund Claims The Tribunal, in its Final Order No.40379/2013 dated 13.09.2013, held that for input services, the date of payment of service tax should be considered for computing the limitation period. Since the payment was made after 01.07.2007, the claim was within the one-year time limit, making the appellant eligible for the refund. Issue 3: Consideration of Cenvat Credit for Refund Eligibility The original authority rejected the refund claim on the grounds that the appellant had not availed Cenvat credit and the refund claim was time-barred. The Tribunal had previously addressed this issue, stating that the appellant was eligible for a refund even if Cenvat credit was not availed, as per Rule 5 of the Cenvat Credit Rules, 2004. Issue 4: Compliance with Tribunal's Orders by Adjudicating Authorities Despite the Tribunal's clear order allowing the refund, the adjudicating authority re-adjudicated the matter and rejected the refund claim again. The Tribunal criticized this action, emphasizing that the adjudicating authority must comply with higher appellate orders. The Tribunal referenced the Supreme Court's judgment in Union of India Vs Kamlakshi Finance Corporation Ltd., highlighting the importance of judicial discipline and adherence to appellate decisions. Conclusion: The Tribunal set aside the impugned order, allowed the appeal with consequential relief, and directed the refund sanctioning authority to process the refund without further litigation. The Tribunal stressed that non-compliance with its orders could amount to contempt of court and urged the Principal Chief Commissioner to ensure proper training and instructions for adherence to judicial orders.
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