2024 (7) TMI 382 - AT - Service Tax

Recovery of the service tax under reverse charge mechanism for the services availed during the period 01.01.2003 to September 2007 - refund of the service tax paid was rejected on the ground that the appeal is pending before this tribunal and the amount of credit confirmed by the adjudicating is one and the same - HELD THAT - The amount of Rs.4,81,43,943/- which was availed as credit, on the service tax paid being part of the amount included in the said demand, on conclusion of the proceeding, the appellant filed refund claim for Rs.4,81,43,943/-, which was rejected on the ground of pendency of the present appeal before this Tribunal. The appellant filed appeal against the said order of rejection of refund and it is now pending before the learned Commissioner(Appeals) as stated by the learned advocate for the appellant. Since the amount of cenvat credit availed and later reversed by the appellant on 31.08.2010, is also claimed as refund pursuant to the de novo order, the present appeal becomes infructuous. Appeal disposed off.

Summary

Issues:
1. Disallowance of cenvat credit of Rs.4,81,43,943/-.
2. Eligibility of credit claimed as refund.
3. Pending appeal before CESTAT.

Analysis:
1. The appeal was filed against Order-in-Original No.32/2011 dated 13.05.2011 passed by the Commissioner of Central Excise and Service Tax, LTU, Bangalore. The appellant, engaged in providing various taxable services, availed cenvat credit of Rs.4,81,43,943/- on service tax paid to overseas companies. A show-cause notice was issued for recovery of the credit, which was confirmed with interest and penalty. The appellant argued that the credit was reversed under protest and a refund claim was rejected due to pending appeal. The Tribunal found that the appeal became infructuous as the credit was part of a dropped demand. The matter was directed to the Commissioner(Appeals) for consideration of the refund claim.

2. The appellant had entered into a license agreement with foreign companies for technical information transfer. A show-cause notice was issued for service tax demand, which was confirmed but later dropped. A refund claim of Rs.4,81,43,943/- was rejected due to pending appeal. The Tribunal noted that the credit claimed as refund was part of the dropped demand, making the present appeal infructuous. The Commissioner(Appeals) was directed to decide the pending appeal on merit.

3. The Tribunal considered the history of the case, including the remand by the Tribunal and subsequent dropping of the demand by the Commissioner. The appellant's refund claim was rejected based on the pending appeal. As the credit claimed for refund was part of the dropped demand, the Tribunal disposed of the appeal, directing the Commissioner(Appeals) to decide the pending appeal on the refund claim. The appeal was deemed infructuous in light of the circumstances.