Tribunal directs refund of input service credit without unjust enrichment issue.

The Tribunal allowed the appeal, directing the lower authority to quantify the refund amount eligible for the appellant after complying with the relevant rules. The Tribunal emphasized that the refund being of input service credit, the question of unjust enrichment did not arise in this case.

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Issues:
Refund claim of excess input tax credit reversal under Cenvat Credit Rules, 2004.

Analysis:
The case involved a dispute regarding the refund claim of excess input tax credit reversed by the appellant under the Cenvat Credit Rules, 2004. The appellants had entered into Business Solutions and Business Promotion Agreements with M/s. Amazon Ltd., where service tax was collected by Amazon for services provided to the appellants. The appellants utilized input services for both trading and providing taxable services. They reversed the entire input service credit under wrong advice but later filed refund claims for the excess payment made after obtaining proper legal advice. The Commissioner (Appeals) held that the appellants were eligible for a refund of a specific amount but required them to pay/reverse credit as per Rule 6(3A)(i) due to non-compliance with a procedural requirement of intimating the department with regard to their option.

The appellant argued that the procedural requirement of intimating the department was merely procedural and should not result in the denial of the substantive right to credit. They relied on case laws to support their argument. The department, represented by Ms. Sridevi T., supported the findings of the impugned order, stating that the appellants had to reverse credit as per Rule 6(3)(i) due to non-compliance with the procedural requirement. The Tribunal analyzed the case and observed that the appellants were compelled to reverse credit only due to the failure to intimate the department about their option, which was deemed unjustified. Referring to case laws, the Tribunal held that the denial of substantive right based on procedural lapses was unwarranted. The Tribunal directed the lower authority to quantify the amount eligible for refund after complying with Rule 6(3)(i) and remanded the matter for further adjudication, ruling in favor of the appellant against the Revenue.

In conclusion, the Tribunal allowed the appeal, directing the lower authority to quantify the refund amount eligible for the appellant after complying with the relevant rules. The Tribunal emphasized that the refund being of input service credit, the question of unjust enrichment did not arise in this case. The decision was pronounced in open court on 03.11.2020.

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