2026-VIL-1303-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Refund of CENVAT Credit under Section 142 of the CGST Act, 2017 - Transitional provisions for cash refund of CENVAT credit not transitioned into GST regime – Appellant filed revised ST-3 return claiming additional CENVAT credit on input services and filed refund claim under Section 142(9)(b) CGST Act but Department rejected refund alleging non-production of complete primary invoices and non-substantiation of services falling under excluded input services category – Whether refund of CENVAT credit can be allowed under Section 142(3) CGST Act when admissibility of credit itself is in question due to non-production of supporting documents and failure to clarify nature and use of services – HELD – As the old law stands repealed, The Section 142(3) of the CGST Act can be seen as creating a new statutory right to cash refund of transitional credit, subject mainly to, the proof that credit legitimately accrued and the satisfaction of test of unjust enrichment. The prevailing judicial precedent is to permit such refunds, once its eligibility and correctness is verified - CENVAT credit is a substantive right but burden of proof strictly lies on the claimant under Section 11B of Central Excise Act and Rule 5 of CENVAT Credit Rules – Non-production of complete primary invoices in large number of cases and failing to utilize multiple opportunities to submit clarification of excluded input services reveals lack of due diligence and failure to discharge burden of proof on part of claimant – Once basic requirement of eligibility of credit is in question then refund under Section 142(3) CGST Act does not arise – The impugned order is upheld and the appeal is dismissed - Delay in Filing Revised Return – Compliance with time limit for filing revised return under Section 142(9)(b) CGST Act read with Rule 7B Service Tax Rules – Appellant filed original ST-3 return on 14.08.2017 and revised return on 29.09.2017 thereby filing revised return on 46th day instead of prescribed 45 days from date of original filing – Whether delay of one day in filing revised return constitutes procedural lapse which can be overlooked or whether time limit is sacrosanct requirement – HELD – Legal provisions with specific time limit such as Rule 7B incorporated in statute to correct previous errors or bona-fide mistakes are to be read strictly – Any delay in filing of revised return even of one day cannot be further diluted by referring it as procedural lapse. Time limits specified in special statutes for correction of errors operate as independent requirements and legislature ensures certainty and predictability in legal proceedings by providing detailed provisions governing limitation periods – Time limit specified under Rule 7B is sacrosanct. The delay of one day in filing revised return cannot be condoned as procedural delay – Appeal dismissed - Late Fee for Delayed Filing of Return – Applicability of Rule 7C to revised returns filed under Rule 7B Service Tax Rules – Appellant contended that although revised return was filed with delay of one day the delay can be regularized by imposition of late fee prescribed under Rule 7C – Whether Rule 7C which prescribes late fee for delayed filing of returns is applicable to revised returns filed under Rule 7B – HELD – Rule 7C itself clearly restricts scope to returns under Rule 7 and does not cover revised returns stipulated in Rule 7B – Notification No.19/2016 came into existence on 01.03.2016 at which time Rule 7B existed alongside Rule 7 but absence of reference to Rule 7B in said Notification clearly confirms that intent of provision was to make it applicable with respect to Rule 7 only and not Rule 7B – Rule 7C does not apply to revised returns filed under Rule 7B. Submissions of appellant on applicability of Rule 7C are not legally tenable – Appeal dismissed - Deemed Date of Filing – Applicability of Board's Circular for filing revised returns – Board's Circular No. 207/5/2017-ST dated 28.09.2017 clarified that all ST-3 returns filed on or before 31.08.2017 shall be deemed to be filed on 31.08.2017 – Appellant contended that said Circular is applicable for filing revised returns thereby making revised return filed on 29.09.2017 timely – Whether Board's Circular providing deemed date of filing for original returns applies to revised returns filed under Rule 7B for compliance with time limit specified in Section 142(9)(b) CGST Act – HELD – The said Circular is applicable in cases of invoices pertaining to Reverse Charge Mechanism. Records indicated that majority of invoice numbers referred did not pertain to RCM and remaining details of RCM related invoices form part of excluded input services under Rule 2(l) of CENVAT Credit Rules – In the instant case it is not only non-compliance of provisions of Section 142(9)(b) of CGST Act, 2017, but also non-fulfilment of conditions enumerated in Rule 9 of Cenvat Credit Rules,2024, with respect of non-submission of supporting documents to claim admissibility of Cenvat credit - Appellant failed to provide clarification regarding eligibility of such RCM related services for credit despite several opportunities granted. Board's Circular is not applicable for deeming revised return as timely filed – Contention of appellant regarding applicability of Board's Circular is rejected - New Allegations in Remand Proceedings – Whether fresh allegations can be raised by adjudicating authority in remand proceedings – Original Adjudicating Authority rejected refund on ground of inadmissibility of credit – Matter was remanded by Appellate Authority for fresh decision. On remand authority proposed to reject refund on ground of delay in filing revised return – Whether after remand by Appellate Authority adjudicating authority can raise new grounds not previously raised in original order – HELD – Original Adjudicating Authority while deciding refund application had made specific observation regarding non-examination of other aspects of admissibility as appellant had not provided records relating to admissibility of CENVAT credit – On remand the Adjudicating Authority examined violations under Section 142(9)(b) CGST Act and held the same was sufficient to reject refund claim – Issues raised in both Orders dated 23.06.2020 and 09.11.2021 are essential requirements under Section 142(9)(b) CGST Act. There is no merit in submission that new allegations were raised.
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