2024 (11) TMI 790 - AT - Service Tax

CESTAT upholds CENVAT credit refund for export services despite revenue's challenge on documentary evidence

The CESTAT Bangalore dismissed the revenue's appeal against a refund order. The assessee, registered for management consulting and related services, ... Refund claim - input services have been used in the export of output service - Assessee registered under Management Consultant, consulting Engineers, Manpower recruitment agency, maintenance or repair service. Towards un utilized CENVAT credit - Adjudicating authority rejected refund claim as held that the assessee had not produced any evidence in support of the utilization of the input services for the export service, there is no documentary evidence with regard to the use of the services, not submitted the rent agreement in respect of the input service provider, there is no correlation with the FIRC and export invoices ..etc. HELD THAT:- It is an admitted fact that Appellant has made claim the refund of CENVAT credit for the services rendered by them for export of goods. While considering the issue in the matter of M/s Eveready Industries India Ltd [2016 (4) TMI 688 - MADRAS HIGH COURT] as held once an application for refund is allowed under Section 11B, the expression ‘erroneous refund’ appearing in sub-section (1) of Section 11A cannot be applied. If an order of refund is passed after adjudication, the amount refunded will not fall under the category of erroneous refund so as to enable the order of refund to be revoked under Section 11A(1). One authority cannot be allowed to say in a collateral proceeding that what was done by another authority was an erroneous thing. Therefore, the question of law has to be answered in favour of the appellant/assessee. Also in MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. [2011 (9) TMI 450 - KARNATAKA HIGH COURT] held in the absence of a statutory provision which prescribes that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund, the three authorities committed a serious error in rejecting the claim for refund on the ground which is not existence in law. Considering the facts and circumstances as stated above, the Commissioner appeals rightly passed impugned order considering the statutory provision and decisions of the appellate authorities. Appeal dismissed. Issues:1. Rejection of refund claim by Adjudication authority due to lack of evidence.2. Appeal filed before Commissioner (Appeals) challenging the Adjudication authority's decision.3. Appellant's challenge of the Commissioner (Appeals) decision.4. Prima facie infructuous nature of present appeals.5. Merits of the case regarding registration for export services and nexus between input and output services.6. Power of Appellate Authority to remand the issue.7. Interpretation of legal provisions and judicial precedents in relation to refund claims.8. Discrepancy in the quantification of refund allowed in the orders.Analysis:1. The Respondent filed a refund claim for unutilized CENVAT credit for input services used in exporting output services. The Adjudication authority rejected the claim citing lack of evidence supporting the utilization of input services for export, absence of necessary documentation, and discrepancies with FIRC and export invoices.2. An Appeal was filed before the Commissioner (Appeals) who found in favor of the Appellant, noting the Appellant's possession of centralized registration for Service Tax and export of output services from registered premises only. The Commissioner (Appeals) deemed the other contentions of the Adjudication authority as unsustainable and allowed the appeal.3. The Appellant challenged the Commissioner (Appeals) decision, arguing that there were no registered premises for the output services exported. The Appellate authority's decision was criticized for not adequately verifying documents and payment particulars before allowing the appeal fully.4. The Respondent contended that the present appeals were infructuous due to a prior Order-in-Appeal that had been accepted and the sanctioned refund amount already paid, unchallenged by either party.5. Regarding the merit of the case, the Respondent's Counsel argued that the Appellant held valid registration for providing export services, and non-registration for a specific service category should not result in denial of benefits. Relevant judicial precedents and circulars were cited to support the claim that refund cannot be denied for input services used in exporting goods.6. The issue of the power of the Appellate Authority to remand the matter was raised, with reference made to a judgment of the Hon'ble High Court of Madras.7. The Tribunal analyzed various legal provisions and judicial precedents to support the Respondent's argument regarding the nexus between input and output services for refund claims.8. A discrepancy in the quantification of the refund allowed in the orders was noted, with the Appellant claiming full refund in the grounds of appeal but only partially allowed in the order. The Tribunal upheld the impugned orders and dismissed the appeals based on the facts and statutory provisions considered.