CESTAT quashes order denying Service Tax refund to Infosys [Read Order]

In a big relief to Infosys, the Customs Excise and Service Tax Appellate Tribunal (CESTAT) Bangalore bench, has directed the GST department to refund the service tax paid. The claim for a refund was for an unutilized cenvat.

Infosys which was recently recognized as the world’s most ethical company made a claim for a refund of unutilized cenvat credit lying on the 31^st of March 2007. The period of dispute is July 2006 to March 2007 and the refund claim application was filed on the 15^th of February 2008. A show-cause notice was issued by the service tax department proposing to reject the refund claim and the claim was dismissed as it was time-barred under S.11B of the Central Excise Act,1944 read with S.83 of the Finance Act 1944. A further appeal was filed with the appearance of Shri N. Anand- learned advocate for the assessee.

The claim was made as 13 service holdings as eligible input services and rejected the 7 input services as ineligible. A proper availment to the cenvat credit in the input services was not made by the tax department hence it cannot deny the refunds on the grounds of ineligibility. 

A similar issue in the case of Suretex Prophylactics India Pvt. Ltd. Vs. CCE held that

“Time-limit has to be computed from the last date of the last month of the quarter which would be the relevant date for the purposes of examining if the claim is filed within the limitation prescribed under Section 11B or otherwise.”

Rule 5 of the CENVAT Credit Rules, 2004, and the above-mentioned ruling, make the department’s appeal lack merit while adjudicating Infosys’s refund claim.  Hence the following judgment SAT 930/2009 was made on 31^st March 2022

“Revenue has not disputed the eligibility when the refund of the input service credit was claimed. In view of the above, we are of the view that the denial of refund cannot be sustained for which the impugned order is set aside to this extent and the appeal of the assessee is allowed with consequential relief, if any.”

The tribunal bench of CESTAT consisting of Mr. P. Anjani Kumar, Technical Member and Mr. P Dinesha, Judicial Member quashes the denial of refund as it cannot be sustained and the appeal is allowed with the refund.