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No refund if demand overlaps for the same period unless refund amount is substantiated from demand

Bimal jain
Service Provider Denied Refund for Overlapping Period with Demand; Must Wait for Demand to Be Set Aside The CESTAT, Chennai ruled that an appellant is not eligible for a refund if the refund period overlaps with a demand period unless the demand is set aside. In this case, a service provider mistakenly paid service tax under forward charge for transporting cylinders, despite the recipient being liable for GST. The appellant's refund claim was rejected by the Adjudicating Authority and subsequent appeals were also dismissed. The CESTAT noted that the appellant could not differentiate the amount subject to the demand, and since the refund period overlapped with the confirmed demand period, the refund was not granted. (AI Summary)

The CESTAT, Chennai in the case of M/S. BHARAT CYLINDERS VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, MADURAI - 2023 (6) TMI 465 - CESTAT CHENNAI held that if refund overlaps with the period for which the demand has been confirm, the assessee will be eligible for refund only when the demand would be set aside.

Facts:

M/s. Bharat Cylinders (“the Appellant”) is inter alia providing goods transport agency services ('GTA services”). The Appellant being a service provider transported cylinders to the bottling unit and mistakenly paid service tax under forward charge in the year 2010, since in case of GTA services the recipient of service is liable to pay GST.

The Appellant filed refund claim of INR 54,736/- for the period January 2010 to December 2010. However, the Adjudicating Authority rejected the refund claim. Aggrieved by rejection Order the Appellant filed an Appeal before the Commissioner of Central Excise (Appeals), Madurai who vide Order-in-Appeal No. 125/2013 dated September 30, 2013 ('the Impugned Order”) rejected the appeal of the Appellant.

Aggrieved by the Impugned Order the Appellant filed an appeal before the CESTAT, Chennai.

Before the CESTAT, the Revenue contended that the Appellant is not eligible for refund since, the demand against the Appellant related to GTA service for the period October 01, 2009 to September 30, 2010. Since, the refund period overlaps with the demand period, the Appellant is not eligible for refund unless the demand for such period is set aside.

Issue:

Whether the Appellant can claim refund for the period which overlaps with the demand period?

Held:

The CESTAT in M/S. BHARAT CYLINDERS VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, MADURAI - 2023 (6) TMI 465 - CESTAT CHENNAI held as under:

  • Noted that, the Appellant was not able to differentiate the amount on which the demand order not applies.
  • Held that, the period involve in the present appeal overlaps with the period for which the demand has been confirmed and therefore appellant is not eligible for any refund.

(Author can be reached at [email protected])

Service Tax
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