2025-VIL-377-CESTAT-MUM-ST
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SERVICE TAX CESTAT Cases

Service Tax - Refund, Service Tax, CENVAT Credit, Exempt Services, Premature Claim - Appellants paid an amount of Rs. 86.70 crores under protest as CENVAT credit reversal on alleged exempt services. They later filed a refund claim which was rejected as premature by the original authority on the ground that the issue of taxability of the disputed services was pending adjudication. The first appellate authority upheld the rejection - Whether the refund claim filed by the appellants is premature and liable to be rejected - HELD - The appellants had placed on record the fact that the demand for CENVAT credit reversal was subsequently dropped entirely by the Commissioner, Service Tax-IV Commissionerate. Once the demand has been dropped, the amount paid under protest becomes refundable as there is no confirmed demand - the rejection of the refund claim as premature was neither appropriate nor had the sanction of law. The eligibility for refund should have been decided by the authorities taking into consideration the final outcome on the taxability of the disputed services - The Tribunal set aside the impugned order and remanded the matter back to the original authority to decide the refund claim afresh on merits, providing a reasonable opportunity of personal hearing to the appellants - the principles of unjust enrichment would not apply to amounts deposited under protest during the pendency of adjudication proceedings - The appeal is allowed by way of remand to the original authority for a fresh decision on the merits of the refund claim in accordance with law - the impugned order is set aside and the appeal is allowed by way of remand
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