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TMI Blog2019 (2) TMI 1420X X X X Extracts X X X X X X X X Extracts X X X X ..... n the input service attributable to the non taxable output service is required to be reduced from the total service tax paid on the output service - thus, the refund should be restricted by the amount of cenvat credit on the input service attributed to not taxable output service. Refund of interest paid on the service tax - Held that:- The service tax was admittedly refundable which is not in dispute even by the department. Therefore, even though there is no specific provision in the Section 102 but once service tax is not payable than the interest paid on such service tax also become refundable. The refund claim is to be restricted by the amount of cenvat credit in respect of input service attributed to non taxable construction servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cators which was upheld by Hon ble Supreme Court reported as 2003 (156) ELT 8202 (SC), therefore, when the output service either become exempted or become non taxable at a later stage. The cenvat credit availed at a time the service was taxable, reversal of cenvat credit cannot be insisted upon, accordingly, the total refund is payable to the appellant without putting any restriction on account of availment of cenvat credit. As regard, the second issue that whether the appellant is entitled for the interest paid on service tax which subsequently become non taxable with retrospective effect. He submits that this very issue has been decided in favour of assessee by this Tribunal in the case of M/s Shanti Structure Pvt. Ltd Vs. CCE ST- Rajko ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urrency of said period, the service was held to be non leviable to service tax. Therefore, the facts of M/s Ashok Iron Steel Fabricators (Supra) and in the present case are totally different, the ratio of the said judgment is not applicable. The submission of Ld. Counsel that since there is no specific provision for non availment of cenvat credit under Section 102 of Finance Act, the same cannot be reduced from the total refundable duty which was paid. I find that even though there is no specific provision in Section 102 but Rule 6 clearly provides that the cenvat credit is not allowed in respect of input service which was used in non taxable/exempted service. Therefore, the cenvat credit availed on the input service attributable to the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly, I do not find any reason why the interest could not be refunded to the appellant when refund of service tax was sanctioned by the department. Accordingly, the impugned orders with regard to rejection of interest are set aside. Appeals are allowed. 6. As can be seen from the above order, the issue of refund of interest on the service tax is decided in favour of the assessee. As per my above discussion, I hold that the refund claim is to be restricted by the amount of cenvat credit in respect of input service attributed to non taxable construction service. The appellant is entitled for the refund of interest paid on service tax on the output service. Accordingly, the appeal is partly allowed in the above terms. (Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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