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2025 (2) TMI 376 - AT - Service TaxRefund claim - requirement to reverse the Cenvat credit to claim refund in terms of N/N. 27/2012-CE(NT) dated 18.06.2012 - non-fulfilment of condition of para 2(h) of the N/N. 27/2012-CE(NT) dated 18.06.2012 - HELD THAT - Admittedly in this case the appellant has debited Cenvat credit in their books of accounts which shows reversal of Cenvat credit. Although they have transferred Cenvat credit to Tran-1 for the period January 2017 to June 2017 but same was also reversed in June 2018. Therefore it will be treated as that they have reversed the Cenvat credit. If there any delay on the part of the appellant that is only a technical lapse and the substantial benefit of the notification should not be denied for such technical lapse. The refund claim filed by appellant cannot be rejected on these technical grounds as held by the Tribunal in the case of LIGHTSPEED INDIA PARTNERS ADVISORS LLP VERSUS COMMISSIONER CENTRAL TAX (APPEALS) NEW DELHI ADVISORS LLP 2021 (12) TMI 621 - CESTAT NEW DELHI wherein this Tribunal observed that the Commissioner (Appeals) has miserably failed to observe that with the introduction of the GST Act filing of ST-3 return was absolutely done away due to which there was no other possible way with the appellant to debit and to reflect the existing credit in its ST-3 return. The Notification No. 27/2012 dated 18.6.2012 with its condition No 2(h) to my opinion was applicable only during the period prior to GST regime. Since the GST regime has done away with the ST 3 return there remain no provision in GST system to reflect the refund claim in the CENVAT credit balance. The only option was to show its reversal in the Books of accounts. Such reversal still amounts to non availment of Credit and refund whereof remains eligible. Conclusion - The appellant is rightly claimed the refund in terms of Notification No. 27/2012-CE(NT) dated 18.06.2012 and entitled for the refund as the appellant has satisfied the conditions of the Notification No. 27/2012-CE(NT) dated 18.06.2012. The impugned order set aside - appeal allowed.
The issues presented and considered in the legal judgment are as follows:1. Whether the appellant fulfilled the condition of reversing Cenvat credit before filing the refund claim as per Notification No. 27/2012-CE(NT) dated 18.06.2012.2. Whether the reversal of Cenvat credit after filing the refund claim in June 2018 bars the refund claims by the authorities below.Issue-Wise Detailed Analysis:Issue 1:- Relevant legal framework and precedents: Notification No. 27/2012-CE(NT) dated 18.06.2012 requires the reversal of Cenvat credit before claiming a refund.- Court's interpretation and reasoning: The appellant debited Cenvat credit in their books of accounts, indicating a reversal. They also transferred Cenvat credit to Tran-1 for a specific period but reversed it in June 2018. The Tribunal emphasized that the reversal of Cenvat credit in books of accounts should be considered compliance.- Key evidence and findings: The appellant reversed Cenvat credit in their books and also in Tran-1 after filing the refund claim.- Application of law to facts: The Tribunal held that the reversal of Cenvat credit, even if delayed, should not deny the substantial benefit of the notification.- Treatment of competing arguments: The Authorized Representative argued that the refund claims were rightly rejected due to the reversal of Cenvat credit after filing the refund claim.- Conclusions: The Tribunal found that the appellant satisfied the conditions of Notification No. 27/2012-CE(NT) dated 18.06.2012 by reversing Cenvat credit, allowing the refund claims.Issue 2:- Relevant legal framework and precedents: The issue revolves around whether the reversal of Cenvat credit after filing the refund claim in June 2018 bars the refund claims.- Court's interpretation and reasoning: The Tribunal considered the delay in debiting the Cenvat credit as a procedural lapse, not substantial enough to disentitle the appellant from claiming the refund.- Key evidence and findings: The appellant reversed the credit in GSTR-3B, albeit with a delay in debiting the same.- Application of law to facts: The Tribunal applied the precedent that a delay in debiting the Cenvat account is a procedural delay that does not disqualify the appellant from claiming the refund.- Treatment of competing arguments: The Authorized Representative contended that the refund claims were rightly rejected due to the delay in debiting the Cenvat credit.- Conclusions: The Tribunal held that the delay in debiting the Cenvat credit was procedural and did not disentitle the appellant from claiming the refund, setting aside the impugned orders and allowing the appeal.Significant Holdings:- The Tribunal emphasized that technical lapses should not deny the substantial benefit of notifications, allowing the appellant's refund claims.- The Tribunal held that the delay in debiting the Cenvat credit was procedural and did not disqualify the appellant from claiming the refund, setting aside the impugned orders and allowing the appeal.In conclusion, the Tribunal ruled in favor of the appellant, allowing their refund claims based on the reversal of Cenvat credit, despite technical lapses and delays in debiting the credit. The judgment highlights the importance of compliance with notification conditions and the interpretation of procedural delays in claiming refunds.
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