COMMISSIONER OF SERVICE TAX SERVICE TAX COMMISSIONERATE BANGALORE Vs. M/S. QUALITY ENGINEERING & SERVICE TECHNOLOGIES (PVT.) LTD.

JUDGEMENT

(1.) THIS appeal of the department is directed against an order by the Commissioner (Appeals) on an appeal by the respondent (assessee). The respondent had filed two refund claims with the original authority claiming refund of unutilized CENVAT credit of service tax paid on certain taxable services which were claimed to be input services availed for export of output services. The total amount claimed as refund was Rs.45,44,827/ -, out of which an amount of Rs.6,38,071/ - was sanctioned as refund. Against rejection of the claim of Rs.39,06,756/ -, the assessee preferred an appeal to the Commissioner (Appeals). The appellate authority held in para 9 of its order that the guidelines prescribed in Board's circular No. 120/1/2010 dated 19.1.2010 required to be followed for ascertaining whether the necessary nexus existed between the input services and the output service for the purpose of refund of the CENVAT credit taken on the input services. The appellate authority further held that such nexus was to be established through a Chartered Accountant's certificate on a declaration made by the refund -claimant. In the present appeal of the Revenue, the only ground raised by the appellant against the above order of the Commissioner (Appeals) is that the order was passed without jurisdiction inasmuch as the appellate authority did not have the power of remand. In this connection, the appellant has relied on the Supreme Court's judgment in MIL India Ltd. vs. CCE, Noida : : 2007 (210) E.L.T. 188 (S.C.) wherein it was held that the power of remand by the Commissioner (Appeals) had been taken away by Parliament by amending Section 35A of the Central Excise Act with effect from 11.5.2001 under the Finance Act, 2001. The learned Deputy Commissioner (AR) reiterates this legal position and prays for setting aside the impugned order.

(2.) THERE is no representation for the respondent despite notice.

(3.) AT the same time, the reason found by the learned Commissioner (Appeals) for de novo adjudication of the refund claim has to be appreciated. When the order -in -original in this case was passed by the Deputy Commissioner, the Board's circular was not in existence. The circular was taken note of by the appellate authority. On our part, we also note that the circular prescribed a procedure for dealing with refund claims filed under Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. -C.E.(NT) dated 14.3.2006. According to this procedure, where the amount claimed as refund exceeds Rs.5/ - crores as in the instant case, the declaration filed by the claimant will have to be certified by a Chartered Accountant. As the claimant's declaration is required to establish nexus between input service and the output service, as also to arrive at the correct amount of refund, the Chartered Accountant's certificate would also cover both the aspects. As rightly observed by the Commissioner (Appeals), in the instant case, the amount claimed as refund being in excess of Rs.5 crores, Chartered Accountant's certificate is mandatory as per the circular. Therefore, the assessee's claim for refund of Rs.39,06,756/ - has to be re -adjudicated by the original authority in terms of the Board's circular. Needless to say that the claimant should be given a reasonable opportunity of producing Chartered Accountant's certificate and of being personally heard. To enable the original authority to do so, we set aside the impugned order and allow this appeal by way of remand. The stay application also stands disposed of.