Service Tax Refund Re-computation Request Treated as Fresh Claim without Complying Appellate Order: CESTAT sets aside New Order [Read Order]
The adjudicating authority’s role was limited to calculating the admissible refund as directed in 2017, and that treating the compliance letter as a new refund application was an irregularity rendering the proceedings void.
Service Tax - Refund - Fresh Claim - Appellate Order - CESTAT - taxscan
Service Tax - Refund - Fresh Claim - Appellate Order - CESTAT - taxscan
The Customs, Excise and Service Service Tax ( CESTAT ), Mumbai, has held that refund proceedings initiated by the adjudicating authority on the basis of a request letter, without giving effect to binding directions issued by the Commissioner (Appeals), are invalid in law.
The Tribunal declared such proceedings non est and directed the refund sanctioning authority to strictly comply with the earlier appellate order.
Deutsche CIB Centre Pvt. Ltd., the appellant, is an exporter of services, sought refunds of accumulated unutilised CENVAT credit through applications filed in 2012. The refund sanctioning authority partly allowed the claims in 2013 but rejected portions stating lack of nexus between input and output services, and also failed to grant statutory interest.
On appeal, the Commissioner (Appeals), vide order dated 27 February 2017, upheld the refund to a major extent and remanded the matter for re-computation of admissible refund after verifying invoices and FIRCs, with directions to sanction the balance amount.
However, instead of carrying out the re-computation, the adjudicating authority treated the assessee’s subsequent compliance request of January 2019 as a fresh refund claim and rejected it as time-barred. This rejection was later upheld by the Commissioner (Appeals) in May 2020, compelling the assessee to approach CESTAT.
The Tribunal, per Dr. Suvendu Kumar Pati (Judicial Member), held that the adjudicating authority’s role was limited to calculating the admissible refund as directed in 2017, and that treating the compliance letter as a new refund application was an irregularity rendering the proceedings void. The subsequent affirmation of such proceedings by the Commissioner (Appeals) in 2020 was also found to be unsustainable.
Accordingly, the Tribunal set aside the impugned order and directed the Assistant Commissioner of CGST & Central Tax, Mumbai, to implement the 2017 appellate order without delay, recompute the admissible refund, and release payment along with applicable interest within two months of receipt of the order.
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