The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), while allowing a refund claim of Rs. 16,93,074/- to the appellant, Origin Learning Solutions Pvt. Ltd held that the omission to mention the credit availed in ST-3 returns is only a procedural lapse on the ground of which, a refund cannot be denied.
The appellants, a private limited company, had discharged service tax on input services under the reverse charge mechanism and had availed the credit. Though the availment of credit was properly accounted for, they omitted to mention the same in their ST-3 returns. The department noticed this defect and accordingly, rejected their refund claim by holding that since the said credit has not been shown in the ST-3 returns, the appellants are not eligible for a refund of the same.
It was argued on behalf of the department that the appellants had not reflected the credit taken in the books to the tune of Rs.16,93,074/- in their ST-3 returns. According to them, only if the credit availed by them is mentioned in the ST-3 returns, the department would not be able to verify the same.
It is not in dispute that the appellants are eligible for credit to the tune of Rs.16,93,074/- on the service tax paid by them under the reverse charge mechanism on input services availed by them. The only reason for denying the credit is that they have not reflected such availment of credit in ST-3 returns for July 2013 to September 2013. The services having been exported, the service tax paid on the input services used for export of services should be refunded to the appellants as per Rule 5 of Cenvat Credit Rules, 2004. The appellants have properly accounted in their books of account. Not mentioning the credit availed in ST-3 returns is only a procedural lapse, which can be condoned.Subscribe Taxscan AdFree to view the Judgment