No records to prove availment of Cenvat Credit while Rejecting Service Tax Refund Claim: CESTAT directs Re-Adjudication [Read Order]

The Bangalore Bench of Central Excise and Services Tax Appellate Tribunal (CESTAT) has set aside the service tax refund claim order and directed the adjudicating authority to re-adjudicate the case as there was no evidence or records were submitted to prove the availment of Cenvat Credit during Service Tax refund claim.  

The appellants filed three refund claims for the quarter July 2008 to September 2008, October 2008 to December 2008 and January 2009 to March 2009 of the service tax paid in terms of Notification No.41/2007-ST dated 06/10/2007 as amended by Notification No.17/2008-ST dated 01/04/2008.

The adjudicating authority allowed a refund of service tax by passing separate orders for Rs.92,207, Rs.48,121 and Rs.23,651. Since the refunds were sanctioned in contravention of the conditions of the Notification No.41/2007 as amended, the Revenue preferred appeals before the learned Commissioner (Appeals), who in turn, set aside the refund orders and allowed the Revenue’s appeals.

The counsel of the appellant submitted that regarding availment of Cenvat credit in relation to the service tax refund claimed by the assessee, there was no specific finding recorded by the adjudicating authority. However, he submitted that the assessee has not availed Cenvat credit in claiming a refund of service tax under the said Notification No.41/2007-ST.

Conversely, the counsel of the respondent asserted that in the absence of specific findings about the fact whether the assessee has availed Cenvat credit or otherwise, the refund of service tax paid cannot be extended to them under Notification No.41/2007-ST as amended.

After taking into account the arguments made by both counsels, the bench noted that although the adjudicating authority had looked into a number of factors while examining refund claims, no specific conclusion had been made in the line as stated by the Commissioner of Appeals in the challenged order, particularly regarding the question of whether the assessee had used Cenvat credit when requesting a refund.

The Two-member bench of Dr D.M. Misra and R. Bhagya Devi directed the adjudicating authority to verify the impugned order after affording an opportunity to the appellant to respond to the said objections.

To Read the full text of the Order CLICK HERE

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