Service Tax Refund can be allowed based on a Certificate Issued by CA  in  absence of an Invoice: CESTAT [Read Order]

The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that a Service Tax refund can be allowed based on a Certificate Issued by a Chartered Accountant (CA)  in absence of an invoice.

M/s.Sodecia India Ltd., the appellants are engaged in the manufacture of MV parts and tools, implements of base metal and have also obtained service tax registration for discharging service tax as a provider of services as well as the recipient of services under reverse charge mechanism in respect of GTA, Legal Services, Business Support Service, Works Contract Services etc.

The appellant filed two refund claims for an amount of Rs.12,39,386/- and Rs.9,67,149/- for a refund of service tax discharged by them on works contract services provided to them by M/s.SRC Projects Pvt. Ltd. and M/s.UR Ground Engineering Pvt. Ltd. The said companies undertook the construction of some building activities and other civil structures for the appellant.

They misunderstood the invoice details given by the service providers and discharged service tax liability on the balance of 60% of the total amount charged for the services. They paid service tax on 31.03.2014. Meanwhile, they had taken credit for the service tax paid by them on 29.04.2014, 22.05.2014 and 30.06.2014. 

During the audit, it was pointed out to them that construction services are not eligible for cenvat credit and that they have to reverse the credit availed on the service tax paid by them for these services.  Therefore, they reversed the credit on 28.02.2015 and filed refund claims on 07.04.2015 for a refund of the service tax paid by them by a mistake.

The original authority rejected the refund claim for an amount of Rs.12,39,386/- on the ground of limitation and unjust enrichment.  About the refund claim for the amount of Rs.9,67,149/-, the original authority though sanctioned the refund, ordered the same to be credited to the Consumer Welfare Fund observing that the amount is hit by the doctrine of unjust enrichment.  On appeal,  the Commissioner (Appeals) upheld the same.

As per sub-section (1) of Section 11B any person who has paid the duty/tax can make an application for a refund, along with documents to show that the incidence of such duty/interest/tax paid by him or collected from him has not been passed on to any other person. The appellant has furnished the Chartered Accountant certificate.

A Single member Coram comprising of Ms Sulekha Beevi C.S., Member (Judicial) observed that the department does not dispute the veracity of the certificate, but merely denies the refund stating that the appellant has to produce further documents.

It was evident that the Chartered Accountant who issued the certificate had stated that he has examined the statutory records of the assessee-appellant and the amount was paid by mistake, and no invoice was issued.

 While allowing the appeal, the Tribunal held that the appellant has succeeded in establishing that the amount is not hit by the doctrine of unjust enrichment and is eligible for a refund. The impugned order was set aside by the Tribunal.

To Read the full text of the Order CLICK HERE

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