Case Law Details
Fairy Food Products Pvt Ltd Vs Commissioner of Central Excise (CESTAT Bangalore)
Introduction: The case of Fairy Food Products Pvt Ltd Vs Commissioner of Central Excise brings into focus the issue of evidentiary proof in matters concerning tax refunds. The Central Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore has ordered re-adjudication in the case due to lack of records to confirm the availment of Cenvat Credit while processing a service tax refund claim.
Analysis: Fairy Food Products had filed three refund claims for service tax paid, as per a specific notification. Following verification, the adjudicating authority sanctioned the refund claims. However, these were later overturned by the Commissioner(Appeals), on the grounds that the refund was sanctioned in contravention of the conditions of the Notification. One critical point of contention was the lack of specific finding recorded by the adjudicating authority on the availment of cenvat credit in relation to the service tax refund claimed by the assessee.
The CESTAT, after reviewing submissions from both sides, determined that specific findings on the Cenvat Credit availment were indeed missing, necessitating the case’s re-adjudication. The CESTAT has hence remanded the case back to the adjudicating authority for re-consideration, ensuring the appellant has an opportunity to respond to the objections raised.
Conclusion: The CESTAT’s ruling highlights the importance of meticulous record-keeping and explicit clarity in the adjudication process when dealing with service tax refund claims. The absence of a clear finding on Cenvat Credit availment led to a pivotal shift in the case outcome, underscoring the need for a thorough and detailed approach in tax-related adjudications.
FULL TEXT OF THE CESTAT BANGALORE ORDER
These three appeals are filed against Order-in-Appeal No.124 to 126/2010-CE dt. 26/03/2010 passed by Commissioner of Central Excise(Appeals-I), Bangalore.
2. Briefly stated the facts of the case are that the appellants have filed three refund claims for the quarter July 2008 to September 2008, October 2008 to December 2008 and January 2009 to March 2009 of the service tax paid in terms of Notification No.41/2007-ST dt. 06/10/2007 as amended by Notification No.17/2008-ST dt. 01/04/2008. After due verification of the refund claims, the adjudicating authority allowed refund of service tax by passing separate orders for Rs.92,207/-, Rs.48,121/- and Rs.23,651/-. Since the refunds were sanctioned in contravention of the conditions of the Notification No.41/2007 as amended, the Revenue preferred appeals before the learned Commissioner(Appeals), who in turn, set aside the refund orders and allowed the Revenue’s appeals. Hence the present appeals.
3. Learned Advocate for the appellant has submitted that while sanctioning the refund claims, the adjudicating authority verified all the documents and after being satisfied with all the conditions referred to in the Notification No.41/2007-ST as amended, the refund was sanctioned to them. It is his contention that in the Revenue’s appeals before the learned Commissioner(Appeals) certain objections were raised which was uncalled for and without any basis. He has fairly accepted that objections raised by the Revenue, particularly regarding availment of cenvat credit in relation to service tax refund claimed by the assessee, there was no specific finding recorded by the adjudicating authority. However, he submitted that the assesse has not availed cenvat credit in claiming refund of service tax under the said Notification No.41/2007-ST dt. 06/10/2007
4. Per contra, the learned AR for the Revenue referred to the objections raised in the grounds of appeal and noted by the learned Commissioner(Appeals) in para 3 of the impugned order and she submitted that while passing the refund order, the adjudicating authority has not referred the details of admissibility in compliance with Notification No.41/2007-ST dt. 06/10/2007 In absence of specific finding about the fact whether the assesse has availed cenvat credit or otherwise, the refund of service tax paid cannot be extended to them under Notification No.41/2007-ST as amended. She submitted that even in the grounds of appeal, specific contravention by the appellant to the said objections has not been mentioned. She submitted that all these facts to be verified before allowing the refund claims.
5. We have considered the submissions advanced by both sides. We find that no doubt, the adjudicating authority while scrutinizing the refund claims examined various aspects, however, no specific finding has been recorded in the line as recorded by the learned Commissioner(Appeals) in para 3 of the impugned order particularly the fact whether the assesse has availed cenvat credit while claiming the refund. In these circumstances, we are of the opinion that the objections recorded in para 3 of the impugned order need to be verified by the adjudicating authority after affording an opportunity to the appellant to respond to the said objections. In the result, the impugned order is set aside and the appeals are allowed by way of remand to the adjudicating authority to verify the said facts as mentioned in para 3 of the impugned order. Needless to mention a reasonable opportunity of being heard be allowed to the appellant. Appeals are allowed by way of remand.
(Dictated and pronounced in open court)
