By TIOL News Service

CHENNAI, APRIL 28, 2017: THE respondents claimed refund of unutilized credit of service tax which was taken by them in relation to export of services.

The claims were rejected by the original authority on the ground that the respondent-assessees had taken registration later on and the refund claim pertains to a period prior to that date.

The Commissioner(A) set aside this order on the ground that registration is merely required for the purpose of maintenance of accounts and for following the procedure and that non-registration cannot be a ground for not enforcing a demand or not allowing a refund; that it is the Government's policy not to burden export with domestic taxes.

Unhappy with this order, the CST, Chennai filed an appeal before the CESTAT.

The Bench while opining that the reasoning adopted by the lower appellate authority is sound also observed that the relevant rules require only those assessees to take registration who are required to pay service tax;that the respondent-assessees were not liable to pay any service tax but are merely claiming refund of the unutilized credit of tax paid on input service and, therefore, the order passed by the lower appellate authority required no interference.

We reported this order as 2011-TIOL-590-CESTAT-MAD .

Revenue is still aggrieved and has filed appeals before the Madras High Court along with applications seeking condonation of delay of 699 days.

The High Court observed that the order of the Tribunal is dated 07.01.2011 and the appeals along with the applications for condoning the delay were filed on 25.06.2013.

It is further remarked that in the affidavits accompanying the applications, cryptic and identical reasons have been given for seeking condonation of the delay.

The High Court further observed -

"4. The only reason, which has been set out, which, quite frankly, is rather vague, is that, the Officials were involved in matters which pertained to challenge laid in some other matters, relating to levy of service tax on renting of immovable properties, transfer of copyright and port services.

5. According to us, the reasons, which the Department was required to supplywere vis-à-vis delay in instituting the instant appeals. Clearly, those reasons have not been furnished via these applications."

It is also noted that the Karnataka High Court in mPortal India Wireless Solutions (P.) Ltd. - 2011-TIOL-928-HC-KAR-ST and Tavant Technologies India Pvt. Ltd. - 2016-TIOL-441-HC-KAR-ST has taken a view in favour of the Assessee in the subject matter.

Holding that the reasons furnished by the appellant Revenue do not supply sufficient cause for condonation of delay, the applications/appeals were dismissed.

(See 2017-TIOL-806-HC-MAD-ST)