2015 (9) TMI 1278 - AT - Service Tax

Tribunal Upholds Refund Claim Pre-Amendment, Emphasizes Approval Requirement for Revenue Appeals

C.S.T., Delhi Versus Genpact India

The Tribunal upheld the Commissioner (Appeals)'s decision on the entitlement to a refund claim under Rule 5 of Cenvat Credit Rules, 2004, allowing refunds ... Denial of refund claim - Business Auxiliary Service - Rule 5 of Cenvat Credit Rules, 2004 read with Notification No.5/2006-CE (NT) dated 14.3.2006 - Refund of unutilized cenvat credit - appeal preferred without approval of the Committee of Commissioners - Held that:- As is evident from sub-section (2) of Section 35B, appeal against the order of Commissioner (Appeals) is to be filed on the recommendation of Committee of Commissioners. In the judgment of Delhi High Court in the case of Commissioner of Central Excise, Delhi I vs. Shri Ram Udyog - [2014 (9) TMI 409 - DELHI HIGH COURT], the Hon’ble High Court essentially held that Committee of Chief Commissioners is not required for filing appeal against the order of Commissioner (Appeals). Thus the said order is no authority to the proposition that recommendation of the Committee of Commissioners is not required for filing of appeal against the Commissioner (Appeals)’s order. - no merit in Revenue’s appeal - Decided against Revenue. Issues:1. Entitlement to refund claim under Rule 5 of Cenvat Credit Rules, 2004.2. Requirement of approval by the Committee of Commissioners for filing an appeal against the order of Commissioner (Appeals).Entitlement to Refund Claim:The case involved a dispute over a refund claim of &8377; 20,41,984 filed by the respondent, a service provider, under Rule 5 of Cenvat Credit Rules, 2004, for the month of April 2005. The primary adjudicating authority rejected the claim citing a notification dated 14.3.2006, which substituted Rule 5 to allow refunds to manufacturers and service providers. The Commissioner (Appeals) ruled in favor of the respondent, citing a CESTAT judgment that allowed refunds for services used in output services exported even before the rule amendment, subject to conditions. The respondent argued that the amendment applied retroactively, supported by a Supreme Court judgment. The Tribunal, after considering both sides, upheld the Commissioner's decision, citing previous judgments and the absence of specific conditions limiting refunds to post-amendment exports.Requirement of Committee Approval for Filing Appeal:The Revenue raised a procedural issue, contending that the appeal was filed without the Committee of Commissioners' recommendation, as required by Section 35B of the Central Excise Act, 1944. The respondent argued that the appeal did not need such approval, citing a Delhi High Court judgment. The Tribunal analyzed the relevant legal provisions and clarified that, as per Section 35B(2), appeals against the Commissioner (Appeals)'s order should be recommended by the Committee of Commissioners. The Tribunal distinguished the Delhi High Court judgment and emphasized the necessity of Committee approval for filing appeals against the Commissioner (Appeals)'s orders. Consequently, the Tribunal dismissed the Revenue's appeal on procedural grounds as well.In conclusion, the Tribunal upheld the Commissioner (Appeals)'s decision regarding the entitlement to the refund claim under Rule 5 of Cenvat Credit Rules, 2004, and dismissed the Revenue's appeal due to the lack of Committee approval for filing the appeal against the Commissioner (Appeals)'s order.