2016 (2) TMI 726 - AT - Service Tax

Successful Appeal Against Rejected Refund Claim; Emphasis on Compliance with Appellate Orders

RITES Ltd. Versus Commissioner of Service Tax, Delhi

RITES Ltd. Versus Commissioner of Service Tax, Delhi - 2016 (43) S.T.R. 270 (Tri. - Del.) Issues:Refund claim rejection, jurisdiction, limitation period, judicial discipline, maintainability, compliance with appellate orders, imposition of cost.Analysis:The appeal was filed by M/s RITES Limited against the rejection of their refund claim by the Deputy Commissioner of Service Tax, which was upheld by the Commissioner of Central Excise (Appeals). The appellant had initially sought a refund of excess tax paid for providing 'consulting engineers' service. Despite the clarification received from the Director General of Service Tax, the refund claims were rejected. However, the Commissioner (Appeals) allowed the appeals, and these orders attained finality as they were not challenged by the Revenue.The original authority issued a show cause notice after the Commissioner's order, resulting in partial refund and rejection of the remaining claims on the grounds of being time-barred. The appellant contended that the refund should have been sanctioned promptly after the Commissioner's order and raised concerns about the authority's failure to follow the appellate direction. The appellant also highlighted the extension of the refund period due to amendments in May 2000.The Tribunal noted that this was the second round of appeal and emphasized that the original authority was obligated to implement the direction for consequential relief as per the earlier appellate orders. The Tribunal criticized the refund sanctioning authority for re-examining the issue of limitation without proper consideration, indicating a lack of judicial discipline and understanding of tax law.It was emphasized that all grounds against an assessee should be stated comprehensively initially, and the original authority's actions were seen as an attempt to deny the refund by any means necessary. The Tribunal reiterated that once an order attains finality, the authority must release the refund, and raising maintainability issues later is improper and indicative of obstinacy.The judgment highlighted the importance of compliance with appellate orders and the hierarchical appellate mechanism in tax matters. The Tribunal condemned the refund sanctioning authority's actions as an act of indiscipline and impropriety, leading to unnecessary burdens on the appellate process. Consequently, the impugned order was set aside, and a cost of ` 10,000/- was imposed on the Deputy Commissioner of Central Excise, Service Tax Division -III, Delhi for their actions.