2021 (7) TMI 102 - AT - Service Tax

Tribunal grants appeal for refund claim, criticizes misinterpretation, emphasizes procedural fairness

Convance Clinical Development Pvt. Ltd. Versus Commissioner Of Central Tax, Bengaluru East

Convance Clinical Development Pvt. Ltd. Versus Commissioner Of Central Tax, Bengaluru East - 2021 (50) G. S. T. L. 433 (Tri. - Bang.) Issues:1. Rejection of refund claim by Commissioner(Appeals) for unutilized cenvat credit availed during a specific period.2. Dispute regarding the debiting of the refund claim amount from the cenvat credit and service tax return at the time of making the refund.3. Allegation of transitioning the credit into GST regime and non-compliance with the conditions of the notification.4. Appellant's contention of procedural lapse and substantive right to claim refund as a 100% exporter of service.5. Misinterpretation of Notification No.27/2012 and failure to consider submissions made during adjudication proceedings.6. Appellant's argument of inadvertent transition of credit, subsequent reversal, and the need for a liberal view on the mistake.Analysis:1. The appellant, engaged in providing support services to group companies outside India, claimed a refund of unutilized cenvat credit for the period April 2016 to June 2016. The refund was rejected on the grounds of transitioning credit to the GST regime and non-compliance with Notification No.27/2012.2. The appellant argued that the rejection was based on the failure to debit the refund amount from cenvat credit and service tax return, despite subsequent reversal in GSTR-3B. The Commissioner(Appeals) upheld the rejection, citing non-adherence to notification conditions.3. The Tribunal found that the appellant had indeed reversed the claimed amount in the cenvat credit account before filing the refund claim, as required by the Notification. The misinterpretation of the notification's requirements led to the erroneous rejection of the refund claim.4. Emphasizing the appellant's status as a 100% exporter of service and the rectification of the inadvertent credit transition, the Tribunal held that the procedural lapse should not deny the substantive right to claim a refund. Precedents were cited to support the argument of not allowing procedural lapses to defeat legitimate refund claims.5. The Tribunal criticized the impugned order for overlooking the appellant's submissions and factual inaccuracies in observations. It highlighted that the appellant had rectified the mistake voluntarily and informed the authorities before the adjudication order.6. Ultimately, the Tribunal set aside the impugned order, acknowledging the inadvertent error in transitioning the credit, the subsequent reversal, and the appellant's compliance with the notification conditions. The decision favored the appellant, allowing the appeal with consequential relief, if any.