2023 (9) TMI 869 - AT - Service Tax

Tribunal remands case for fresh adjudication on refund eligibility, emphasizes adherence to specific provisions

M/s. eShakti. com Private Limited Versus Commissioner of G.S.T. and Central Excise, Chennai

The Tribunal remanded the case back to the original authority for fresh adjudication on the appellant's eligibility for refund under Notification No. ... Refund/rebate of the Service Tax paid on input services - refund rejected on the ground of non-jurisdiction and non-submission of documents - HELD THAT:- This is a case where the original authority has decided the matter afresh based on the directions given by a co-ordinate Bench of the Tribunal in E-SHAKTI COM PVT. LTD. VERSUS CST [2016 (10) TMI 1384 - CESTAT CHENNAI] and M/S. ESHAKTI. COM PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI-II [2016 (11) TMI 1746 - CESTAT CHENNAI], directing him to examine such evidence and pleadings, if any, both on facts and law as well as apply proper law and pass a reasonable and speaking order. The Tribunal being the final fact-finding authority, the direction to apply proper law would entail the original authority examining the refund claim in the light of the proper Notification which is brought to his notice by the appellant during the remand proceedings. Prima facie, the Revenue is questioning the eligibility of the appellant-assessee for refund / rebate under Notification No. 41/2012 ibid. Further, as per the Revenue’s grounds of appeal, the assessee had in fact made a claim under Notification No. 41/2012 which was rejected in the said order, which later on came to be appealed against and set aside by this Bench vide above Orders. It is deemed appropriate to set aside the impugned order and remit the matters back to the file of the Commissioner (Appeals) and the Commissioner (Appeals) shall pass a fresh order on the eligibility of the appellant in terms of Notification No. 41/2012-S.T. dated 29.06.2012 alone and thereafter, pass a speaking order in accordance with law. Appeal allowed by way of remand. ISSUES PRESENTED AND CONSIDERED 1. Whether an adjudicating authority, on remand from the Tribunal directing de novo consideration, may examine and decide a refund/rebate claim under a different Notification raised during remand proceedings, notwithstanding that the original claim was filed under Rule 5 of the CENVAT Credit Rules, 2004. 2. Whether a refund/rebate claim based on a different Notification raised for the first time during de novo proceedings is barred by limitation or otherwise impermissible as a 'new claim' that falls outside the scope of the remand. 3. Whether mere showing of CENVAT credit in books (without utilizing it or reversing it) amounts to 'taking CENVAT credit' and thereby disentitles the claimant from rebate under the specific Notification relied upon. 4. Whether mentioning an incorrect Notification in the original claim form is fatal to grant of export rebate/refund where the correct Notification is later identified and relied upon during remand proceedings. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Authority to entertain alternative legal ground on remand Legal framework: Remand directed by a co-ordinate Tribunal bench ordered de novo adjudication, including examination of evidence and application of 'proper law' to the refund claims. Precedent treatment: The decision refers to the Tribunal's supervisory role as final fact-finding authority; no specific contrary precedent was applied to restrict consideration on remand to the originally pleaded Notification. Interpretation and reasoning: The Court held that a direction to apply proper law in de novo proceedings contemplates that the original authority must examine the claim in the light of the correct/legal Notification brought to its notice during remand. A remand for de novo consideration is not so narrowly confined that the authority is helpless to adjudicate under the legally appropriate provision if that ground is presented in the remand proceedings. Ratio vs. Obiter: Ratio - where a Tribunal orders de novo adjudication with directions to apply proper law, the adjudicating authority may consider and decide a claim under the correct Notification raised during remand. Conclusion: The adjudicating authority was empowered to examine the claim under the alternate Notification during remand; remand did not prohibit consideration of that legal ground. Issue 2 - Limitation and 'new claim' objection when an alternate ground is raised during remand Legal framework: Limitation rules and the principle that a new ground, if it constitutes a fresh claim, may be time-barred unless it is consequential on the originally filed claim or otherwise permissible to be raised in remand proceedings. Precedent treatment: The Court noted policy considerations that export incentives should not be denied for mere procedural lapses but also recognized that claims cannot be pressed under inappropriate Notifications or without compliance with substantive conditions. Interpretation and reasoning: The Tribunal did not finally decide whether the alternate ground was time-barred. Instead, it observed that questions of limitation and eligibility under the alternate Notification were matters of fact and law requiring fresh adjudication by the Commissioner(A). Given the remand and the Tribunal's supervisory direction, those contentions were to be examined afresh, with opportunity to both parties. Ratio vs. Obiter: Obiter - the Court left the limitation issue open and did not lay down a categorical rule that an alternate ground raised on remand is necessarily immune from limitation objections. Conclusion: The question of whether the alternate Notification claim is time-barred or a new inadmissible claim remains undecided and must be examined in de novo proceedings by the appellate authority. Issue 3 - Whether mere accounting entry of CENVAT credit equals 'taking' CENVAT credit Legal framework: Eligibility under the specific rebate Notification depends on non-availability/ non-utilisation of CENVAT credit as per conditions of the Notification and CENVAT Credit Rules, 2004. Precedent treatment: The appellant relied on authorities holding that mere recording of CENVAT credit in books, absent actual utilization, does not amount to taking credit for disqualification purposes. These precedents were cited in support of the appellant's position. Interpretation and reasoning: The Tribunal noted the Revenue's contention that if CENVAT credit was availed, the rebate under the Notification would be barred. The Court did not resolve the factual/legal dispute on the record but treated it as a substantive issue to be determined afresh by the Commissioner(A) on remand, with opportunity for verification and evidence. Ratio vs. Obiter: Obiter on precedential claims; no binding finding. The Court's decisive instruction was to remit the matter for determination of this factual-legal question. Conclusion: Whether recording of CENVAT credit in books without utilization disqualifies the claimant under the Notification is to be adjudicated de novo; the Tribunal did not accept or reject the contention but required fresh, speaking determination. Issue 4 - Effect of initially stating wrong Notification and later substituting correct Notification Legal framework: Principle that substantive entitlement should not be defeated by mere procedural lapses where the correct legal provision is established; however, formal requisites and compliance with Notification conditions remain material. Precedent treatment: Several decisions were relied upon by the claimant to support the proposition that mentioning a wrong Notification is not fatal if the correct Notification is subsequently relied upon and relevant conditions are met. Interpretation and reasoning: The Tribunal acknowledged the appellant's reliance on precedents but did not conclusively decide the applicability of those authorities to the facts. Instead, the Tribunal held that such issues - whether wrong Notification is fatal and whether the claimant satisfied conditions of the correct Notification - require adjudication in the first appeal with opportunity for evidence and submissions. Ratio vs. Obiter: Obiter as to precedential support; the operative direction is a remand to decide the point on facts and law. Conclusion: The question whether an incorrect initial Notification reference is fatal is left open for determination by the Commissioner(A) on remand with a speaking order. Procedure and Relief The Tribunal set aside the impugned appellate order and remitted the matters to the Commissioner(A) to decide eligibility under the specific Notification cited (Notification dated 29.06.2012) alone, to pass a de novo speaking order after affording reasonable opportunities to both parties, and to do so within 90 days. All substantive issues and contentions were expressly left open for fresh adjudication.