By TIOL News Service

MUMBAI, NOV 13, 2014: BACKGROUND: Stay application filed by the Revenue against the o-in-a was dismissed by the Tribunal on 14.07.2014 by observing that the issue had already been decided against the Revenue and the lower appellate authority had merely followed the Tribunal's order.

The applicant, thereafter, filed an application under Rule 41 of the CESTAT Procedure Rules, 1982 for implementing the order of the Tribunal inasmuch as to direct Revenue to sanction rebate/refund to them.

During the pendency of this application, the appeal filed by the Revenue against the O-in-A was dismissed on 21.08.2014 [2014-TIOL-1794-CESTAT-MUM] and the Tribunal directed the Jurisdictional Asst. Commissioner to dispose of the refund/rebate claim within a period of one month from the date of receipt of that order. The Bench, inter alia, held - ST - As provision of telecommunication service to international roamers would amount to export of service, refund is permissible in law - Revenue appeal dismissed.

When the matter concerning this application came up for compliance,the AR informed the Bench that the order was received by the department on 16.09.2014 only &there was time for implementation. On the next occasion, the AR submitted a report dated 22.10.2014 of the Commissioner of Service Tax, Mumbai , mentioning that although the Pune Commissionerate had sanctioned the refund pursuant to the order dated 12.03.2013 of the Tribunal [2013-TIOL-566-CESTAT-MUM] the Commissioner of Service Tax-I, Mumbai is of the view that it is not compulsory to follow the view taken by Pune Commissionerate and he was of the view that the department's case is having merit; that stay be granted. Thereafter the A.R. submitted a letter dated 28.10.2014 wherein ShriS.K.Singh, OSD of CBEC (Judicial Cell) stated that the Board is considering filing a Civil Appeal against the CESTAT order dated 21.08.2014.

As the Tribunal was not satisfied with the action taken by the Department, therefore, another report was called, enquiring the steps the department had taken, to implement the order of the Tribunal passed on 14.07.2014 and on 21.08.2014.

When the matter was heard recently, a report was received by the Bench from the Commissioner of Service Tax, Mumbai enclosing a letter addressed to the appellant seeking certain documents (challans, invoices & FIRC copies) to scrutinize the refund claim of the appellants also from unjust enrichment angle. Two months' time was also sought to implement the order of the Tribunal.

The applicant assessee took strong objection to this report & request of the Revenue and submitted that issue of unjust enrichment was considered in detail in para 35 of the o-in-a dated 20.09.2013; and had also been decided by the Tribunal in its order dated 18.12.2013 [2014-TIOL-319-CESTAT-MUM] by holding thus -

"5.2 Since the transaction is one of export, the principles of unjust enrichment would not be applicable to export transactions as specifically provided in Section 11B."

For the remaining queries the applicantdrew the attention of the Bench to paragraphs 1 & 23 of the order-in-original which indicated that all the relevant documents are available on record and have been considered by the lower authorities earlier.

It is, therefore, submitted that the Commissioner is gaining time by one reason or the other and not sanctioning the refund to the applicant; that as this refund bears interest, therefore, by delaying the sanctioning, loss will be caused to exchequer which may be in several lakhs. In these circumstances, the applicant prays that disciplinary action against the erring officials be initiated.

The Bench inter alia observed -

"4. After considering the report filed by the learned Commissioner and the recordings made by the lower authorities in the proceedings in this matter we find that the sanctioning authority is only gaining time to sanction the refund claim. We have also observed that the learned Commissioner of the Service Tax, Pune in other proceedings against the applicant on the same issue has already sanctioned the refund claim to the applicants as per the decision of this Tribunal vide order dated 12.03.2013 and the Commissioner of the Service Tax, Mumbai is not following the same procedure in this case despite the appeal having been dismissed by this Tribunal, filed by the revenue. Therefore, it is observed by this Tribunal that there is no consistency in the view taken by the departmental officers. Moreover, in this case, there is clear direction to the concerned officer to dispose of the refund/rebate claim within one month. We also find that after the receipt of the order of this Tribunal on 16.09.2014, no steps were taken to implement the order of this Tribunal till 28.10.2014 and no explanation is given for that. In these circumstances, the conduct of the concerned official is not appreciated but in the interest of justice, the time of 15 days is granted to the learned Commissioner of Service Tax-III, Mumbai to dispose of the refund claim, from today itself failing which this Tribunal shall be constrained to initiate contempt of Court proceedings against the erring officials."

After observing as above, comes the bombshell -

"Considering that the claim is having a bearing of interest on the amount of refund, therefore, the authorities have to take expeditious steps to sanction the refund claim to keep in mind the interest is to be paid from the kitty of the general public. The copy of this order be sent to the Chairman, CBEC, Secretary (Rev), the Ministry of Finance and the Hon'ble Finance Minister for necessary consideration."

The matter is to come up for further proceedings on 17.11.2014.

Cadre Reviewed : Only time will tell how many heads would roll! Also see DDT 2473.

(See 2014-TIOL-2263-CESTAT-MUM)