In the recent case, the Mumbai bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) granted relief to Harbinger Systems Private Limited by approving the refund of CENVAT credit for payments made under the Voluntary Compliance Encouragement Scheme ( VCES ) Scheme.
Harbinger Knowledge Products Pvt.Ltd., the appellant-assessee, filed a miscellaneous application seeking to change the cause title to “Harbinger Systems Private Limited.” This request was granted, and the cause title was officially updated.
The appellant challenged the denial of a refund for an amount paid under the VCES Scheme, pursuant to Section 107(2) of the Finance Act, 1994. The adjudicating authority (AA) had initially allowed the refund, but the Commissioner (Appeals) rejected it, citing the provision that any amount paid under Section 107(1) was non-refundable.
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The appellant’s representative argued that Board Circulars and Rule 5 of the CENVAT Credit Rules entitled them to a refund. They supported this with a favorable Tribunal decision in CC.ST-Ahmedabad vs. M/s. Oxygen Bio Research P Ltd.
In response, the Revenue’s representative opposed the appellant’s claim, asserting that any amount paid under a declaration made under Section 107(1) was not refundable under any circumstances.
Upon reviewing both sides and the record, the tribunal referred to its earlier decision in M/s. Oxygen Bio Research P Ltd., which held that the appellant was entitled to CENVAT credit for service tax paid under the VCES Scheme and also confirmed that CENVAT credit is permissible on input services and that the appellant, an SEZ Unit, was entitled to a refund under Notification No. 12/2013-ST.
The bench noted that the Revenue’s representative did not present any contrary decisions or evidence of an appeal or stay against the M/s. Oxygen Bio Research P Ltd. ruling.
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A single member of Ashok Jindal(Judicial Member) set aside the impugned order and allowed the appeal with consequential relief, based on the M/s. Oxygen Bio Research P Ltd. decision.
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