Case Law Details
Convance Clinical Development Pvt. Ltd. Vs Commissioner Of Central Tax (CESTAT Bangalore)
it is not in dispute that the appellant is an exporter and does not have any domestic services at all. Appellant availed input services for the purpose of rendering output service exporting to his foreign company for which he pays service tax and take cenvat credit. Since the appellant was unable to utilize the cenvat credit for payment of its output liability, the appellant filed a refund claim for the period April 2016 to June 2016 which was rejected by the original authority on the ground that appellant has not debited the refund amount in cenvat credit and service tax return and consequently the refund was rejected on the ground that the appellant has transitioned the input tax credit into TRAN-1 and as per Section 142(4), the refund is liable to be rejected once the cenvat credit is transferred to TRAN-1. Further I find that from the documentary evidence on the record, the appellant has proved that he has actually reversed the amount of refund claimed in its cenvat credit account maintained in the books of accounts as prescribed in the Notification before filing the refund claim and Exhibit B clearly shows the reversal of cenvat credit but Commissioner(Appeals) has not appreciated that aspect and has wrongly observed in para 9.1 of the impugned order that the assessee has failed to debit the refund amount in cenvat account. As per the Notification No.27/2012, there is no requirement to debit in the service return, the only requirement under Condition 2(h) of Notification No.27/2012 dt. 18/06/2012 is that the amount i.e. claimed as refund under Rule 5 of the said Rules shall be debited by claimant from his cenvat credit account at the time of making the claim and this condition has been followed by the appellant before filing the claim of refund but the impugned order has misconstrued and misinterpreted the requirement of Notification No.27/2012. Further I find that appellant by sheer inadvertent mistake has transitioned the cenvat credit into TRAN-1 during the GST regime. As soon as, he realized his bona fide and unintentional mistake and the reversal was done in GSTR-3B returns in May 2018 itself. I also find that during the relevant period, the appellant has not utilized the cenvat credit and it was merely a procedural lapse which was rectified by the appellant on its own and was also informed the Department regarding the subsequent reversal in GSTR-3B filed by the appellant in May 2018. In my view, since the appellant who is a 100% exporter of service and has reversed the credit wrongly taken through GSTR-3B is sufficient to hold that the amount of cenvat credit claimed as refund has not been utilized by the appellant in any manner and has been deemed to have been reversed by the appellant. Learned Commissioner(Appeals) should have taken a liberal view of a bona fide mistake committed by the appellant without any intention to claim unjustified refund. I also find that the impugned order has also travelled beyond the show-cause notice because all the submissions made by the appellant during the adjudication proceedings were not considered by both the authorities below. I also find that the act of inadvertent transition of refund amount to GST regime and voluntarily reversal of such amount made by the appellant has been submitted before the adjudicating authority by the appellant vide his letter dt. 13.05.20 18 which is much before the issuance of the adjudication order in October 2018 but the same was not considered by the adjudicating authority.
In view of my discussion above and considering the facts and circumstances, I am of the considered opinion that the transition of refund amount into GST regime was merely inadvertent error and the same was made good by the appellant by reversing the credit into GSTR-3B filed in May 2018. Further I hold that the appellant has not violated conditions of the Notification No.27/2012 dt. 18/06/2012. Hence I set aside the impugned order by allowing the appeal of the appellant with consequential relief, if any.
FULL TEXT OF THE CESTAT JUDGEMENT
The present appeal is directed against the impugned order dt. 05/09/2019 passed by the Commissioner(Appeals), Bangalore whereby the Commissioner(Appeals) has rejected the refund claimed by the appellant amounting to Rs.21,24,883/- for the period April 2016 to June 2016 .
Please become a member. If you are already a member, login here to access the full content.
