TaxTMI 
TaxTMI 
2025 (9) TMI 1849
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....spect of service tax paid under Reverse Charge Mechanism (RCM) on 29.06.2018 for the period October, 2015 to June, 2017 on royalty paid to certain foreign service providers based on the objection raised by the department. This was rejected by the RSA. On appeal, the Commissioner (Appeals) examined the order of rejection passed by the RSA and observed that the denial of refund in terms of Rule 9(1)(bb) of Cenvat Credit Rules, 2004 (CCR) by the RSA would not have any relevance as the subject payments were made by the appellant under RCM and is covered under Rule 9(e) of CCR. However, he further examined the rejection of the refund on the grounds that the said refund is not admissible for cash refund under section 142(3) of the CGST Act and upheld the order of RSA. 3. The admitted facts of the case are that the appellants, had not paid the service tax on the royalty paid to certain foreign service providers in respect of certain import services received by them under RCM, which they should have paid during the period October, 2015 to June, 2017, but have paid the same only after being pointed out by the departmental officer conducting audit during May, 2018 and therefore, it was a ....
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.... Cenvat credit and also that they were not eligible for refund under section 142(3) of CGST Act. According to him, the CGST Act provides for two distinct rights regarding treatment of Cenvat credit under the earlier law viz., under section 140, right to transition of eligible duties and taxes and under section 142, right of refund of Cenvat credit in cash. In their case, section 140 is not applicable and therefore, they would be eligible for refund under section 142. He has also relied on various case laws in his favour, wherein, under similar situations, refunds have been found admissible in terms of section 142(3). The details of these relied upon case laws are as under: S. No. Matter Citation Date of Order Context Bench 1 Pr. CC Vs Granules India Ltd TS-630- HC-2024 (TEL)- CUST 12.12.2024 Refund of CVD and SAD Hon'ble Telangana High Court 2 Granules India Ltd Vs CCT, Hyderabad 2024 (2) TMI 1375 20.02.2024 Refund of CVD and SAD CESTAT Hyderabad 3 Bosch Electrical Drive India Pvt Ltd Vs CCT, Chennai 2023-VIL- 1352- CESTAT- CHE-ST 21.12.2023 Refund of service tax under RCM CESTAT Chennai 4 OSI Systems....
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....st relying on the judgments as under: a) M/s 3E Infotech Vs CESTAT Chennai [2018 (18) GSTL 410 (Mad)] b) M/s Nilkamal Ltd Vs CGST & CE [2021-VIL-273-CESTAT CHE-ST] c) M/s Rakon India Pvt Ltd Vs CCT, Bangalore North [2021 (6) TMI 749] 9. Insofar as issue of reliance placed by Commissioner (Appeals) on the judgment of M/s Servo Packaging Ltd (supra), he submits that the said reliance is erroneous on the grounds that fundamentally it was held in that case that imports under import license are conditional and subject to export obligations and therefore, failure to meet those obligations renders duty paid non-cenvatable, whereas, there are other judgments and judicial precedents where availability of Cenvat credit for import duty is paid due to unmet export obligations have been accepted and in fact, he has relied heavily on the judgment of Granules India Ltd Vs CCT, Hyderabad (supra), where despite citing this judgment, it was held in favour of the appellant. Similar view was also taken by the Tribunal in the case of Aurobindo Pharma Ltd Vs CCT, Hyderabad (supra) and certain other judgments of Coordinate Bench as under: a) Bosch Automotive Electro....
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..../30018/2023 dt.17.03.2023] i) UOI Vs Filco Trade Centre Pvt Ltd [SLP No. 32709-32710/2018] j) Nelco Ltd Vs UOI [2020 (36) GSTL 24 (Bom)] k) M/s TVS Motor Co. Ltd Vs State of Tamil Nade & Ors [2018 (10) TMI 881 - Supreme Court] l) ALD Automotive Pvt Ltd Vs CTO [2018-TIOL-385-SC-VAT] m) CCT, Lucknow Vs Jai Mata Di Cargo Services Pvt Ltd [2018 (15) GSTL 226 (All)] 12. Learned AR has mainly relied on the judgment of Hon'ble Jharkhand High Court in the case of Rungta Mines Ltd (supra), wherein, it was, inter alia, held that section 142(3) does not confer a new right, which never existed under the old regime to the manner of giving relief if the person is not entitled under the existing law. Therefore, while there was a provision for taking the credit of service tax paid under RCM under CCR, prior to 01.07.2017, however, there was no provision for taking the refund of the same in case of their inability to utilize the same on any ground whatsoever. There were only specific situations covered under Rule 5 and 5A of CCR, where refund of Cenvat credit could have been given. Their case is clearly not falling under either Rule 5 or Rule 5A and s....
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....of the conclusions arrived at. The relevant para is cited below: "4. The Tribunal with one line concluded the matter against the appellant-assessee by observing "while it is not the case of the assessee that the goods were so used". The Tribunal has not recorded a clear finding that the production was not being carried out by the assessee in the workshop situated within the factory or that the goods were being used for repair or maintenance of the machinery installed therein. By cryptic and non-speaking order, the Tribunal has upheld the order passed by the Commissioner by applying the ratio of the decision of the Larger Bench in TISCO LTD. (supra) without recording a finding of fact that the production carried out by the appellant was not in the workshop situated within the factory or that the goods produced by it were not used for repair or maintenance of the machinery installed therein. It is not sufficient in a judgment to give conclusions alone but it is necessary to give reasons in support of the conclusions arrived at. The finding recorded by the Tribunal, being cryptic and non-speaking, is set aside and the case is remitted back to the Tribunal for a fresh decision....
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....arned Advocate has also contested the reliance placed on the judgment of Hon'ble High Court of Jharkhand on two grounds; Firstly, that there it was held to be an inadmissible credit, per se, due to certain procedural breach and that is why it was not considered as entitled for refund, which is not the case in their appeal and secondly, the same case law has also been taken into consideration by this Bench in the case of Granules India Ltd (supra) and despite this, the refund in cash was allowed and the same judgment has also been upheld by jurisdictional High Court of Telangana and therefore has binding precedence irrespective of the fact that Hon'ble Supreme Court has made certain observations on appeal filed against such order, by the Revenue and the observation was not in the nature of stay according to the appellant. 18. On going through various case laws cited by both sides, we find that in most of the cases, the Tribunals have been taking different view as regards eligibility of refund under section 142(3). While a set of judgment was primarily taking a ground that if the credit was otherwise not admissible under the erstwhile law, then the same would also not be available....