2025 (9) TMI 1406 - AT - Service Tax

Refund claim for CENVAT on input services in exported services rejected; manual revised return invalid and time-barred

CESTAT dismissed the appeal and upheld rejection of the refund claim for cenvat credit of input services used in exported output services. The tribunal ... Refund claim of cenvat credit of input service used in output services exported - rejection on the ground of limitation as well as that the revised return was not filed electronically and the same was filed manually which is not permitted under law - HELD THAT:- It is found that in this case, the original return was filed on 26.04.2017 electronically and thereafter the refund was filed on 30.06.2017 and revised return was filed manually on 20.07.2017 which is not permitted in the law and therefore, both the authorities have correctly held that revised return cannot be considered as legally filed. Further, it is found that the original return was not amended before filing the refund and the original return has become final unless modified by appropriate proceedings. Further, the decision of M/S LUPIN LIMITED VERSUS COMMISSIONER OF CENTRAL TAX & CUSTOMS (APPEALS), GUNTUR [2023 (3) TMI 741 - CESTAT HYDERABAD] by the Revenue is applicable in the present case, wherein, it has been held that Cenvat credit taken beyond a period of 12 months from the date of invoice/bill of entry, the same cannot be allowed. There is no infirmity in the impugned order which is upheld - Appeal dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether a refund claim under the Cenvat Credit Rules, 2004 can be allowed where the assessee filed the original ST-3 return electronically, filed a refund application thereafter, and subsequently filed a revised ST-3 return manually (non-electronic) to reflect additional input service credit. 2. Whether Cenvat credit claimed and taken beyond twelve months from the date of invoice is admissible for refund purposes. 3. Whether procedural non-compliance (filing a revised return manually when rules require electronic revision) can be excused where there is no dispute as to the genuineness of invoices, payment of service tax and receipt of input services used in exported output services. ISSUE-WISE DETAILED ANALYSIS - Issue 1: Admissibility of refund where revised return was filed manually instead of electronically Legal framework: Rule 7 and Rule 7B of the Service Tax Rules (as applied under the Cenvat Credit Rules, 2004) prescribe that revised ST-3 returns, where required, must be filed electronically; Rule 5 provides for refund of Cenvat credit in respect of input services used in exported output services. Precedent treatment: The impugned decision relies upon prior Tribunal and High Court pronouncements establishing that refund proceedings are executionary in nature and cannot be used to modify a self-assessed return; the judgment under review applies those authorities to hold that an original electronic return, not amended prior to the refund application by a properly filed revised electronic return, stands as the operative assessment. Interpretation and reasoning: The Court found the chronology dispositive: original ST-3 return was filed electronically and became final (no amendment via permitted electronic revision occurred) before the refund claim was made. The revised return was filed after the refund claim and was submitted manually contrary to statutory requirement for electronic filing. Because the statutory scheme specifically mandates electronic revision, a manual revision does not meet the legal requirement and therefore cannot alter the assessment relied upon in refund proceedings. The Court treated refund proceedings as confined to what the assessment (including self-assessment) permits; refund cannot operate to change an assessment after the fact. Ratio vs. Obiter: Ratio - A revised ST-3 return filed manually when the rules expressly require electronic filing cannot be treated as a valid revision; consequently the original electronic return remains operative for refund purposes and refund proceeding cannot be used to retrospectively alter that assessment. Obiter - Observations about available time and alternative administrative steps (e.g., contacting authorities for technical issues) are explanatory but not central to the legal holding. Conclusion: The refund claim could not be allowed to the extent it relied upon entries in a manually filed revised return; the revised manual return was legally ineffectual and the original electronic return governed the refund assessment. ISSUE-WISE DETAILED ANALYSIS - Issue 2: Allowability of Cenvat credit taken beyond twelve months from invoice date Legal framework: Principles limiting admissibility of input credit where claimed beyond specified temporal limits (here, the twelve-month period from invoice/date of bill of entry) as applied under the Cenvat Credit Rules and related jurisprudence. Precedent treatment: The Tribunal applied existing authority holding that Cenvat/input credit taken beyond twelve months from the invoice cannot be allowed. That authority was followed and treated as applicable to deny credits which were not taken within the permissible time frame. Interpretation and reasoning: The Court accepted that the appellant attempted to cover time-barred invoices by filing a revised return after the refund claim; since the revised return was invalid (see Issue 1) and because credits sought related to invoices outside the twelve-month window, those credits could not be admitted for refund. The rulings relied on establish that untimely credit claims cannot be rehabilitated in refund proceedings, which are executionary and cannot effect reassessment to permit belated credits. Ratio vs. Obiter: Ratio - Cenvat credit taken beyond twelve months from the date of invoice is not allowable for refund; this limitation is decisive when the operative return (not validly revised) did not record such credit. Obiter - Ancillary comments on factual non-dispute regarding genuineness of invoices do not alter the temporal statutory bar. Conclusion: Credits claimed in respect of invoices older than twelve months were properly disallowed and do not support the refund claim. ISSUE-WISE DETAILED ANALYSIS - Issue 3: Effect of procedural irregularity where genuineness of invoices and service receipt are not disputed Legal framework: Principle distinguishing substantive entitlement (genuineness, payment, receipt) from procedural compliance required to claim relief; refund proceedings characterized as executionary and constrained by the assessment record unless properly varied per statutory procedure. Precedent treatment: The appellant invoked authorities that emphasize substantial justice and decried denial of benefit on technical grounds where entitlement is undisputed. The Tribunal, however, followed contrary authorities holding that procedure cannot be bypassed and that refund proceedings cannot be used to change assessment outcomes even where invoices are genuine. Interpretation and reasoning: The Court acknowledged that there was no dispute as to genuineness, payment of service tax, and receipt of input services. Nevertheless, it held that procedural compliance (filing revised returns electronically within the statutory regime) is mandatory; permitting a manual revision or allowing refund despite the temporal bar would in effect permit change to the assessment in refund/execution proceedings, contrary to binding precedent. The balance struck gives primacy to statutory filing modalities and temporal limits over equitable claims based on lack of dispute as to underlying transactions. Ratio vs. Obiter: Ratio - Procedural non-compliance that results in the operative assessment not reflecting the claimed credit cannot be cured in refund proceedings even if the underlying invoices are genuine; refund relief depends on the assessment record as properly amended under the rules. Obiter - Policy remarks on fairness and possible technical glitches are not sufficient to override express procedural requirements. Conclusion: Procedural infirmities in filing the revised return and temporal bars to credit claim justified denial of refund despite no contest on invoice genuineness; substantial justice arguments could not prevail against mandatory statutory filing requirements and the executionary nature of refund proceedings. OVERALL CONCLUSION The Tribunal upheld the impugned order: the manually filed revised return was legally invalid where statute required electronic revision; the original electronic return governed the refund assessment; credits claimed beyond twelve months from invoice date were not allowable; and refund proceedings cannot be used to modify assessment records or cure procedural non-compliance even if underlying invoices are genuine. The appeal was dismissed. (Order pronounced in open court.)