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2019 (2) TMI 1420 - AT - Service TaxRefund claim - restriction on the amount of refund - refund of interest paid on service tax when the service tax is refundable in terms of Section 102 of Finance Act, 2016 - Whether the appellant’s refund claim can be restricted by the amount of cenvat credit availed on input service attributed to output service which is not taxable by virtue of Section 102 of Finance Act, 2016? - Held that:- Even though there is no specific provision in Section 102 but Rule 6 clearly provides that the cenvat credit is not allowed in respect of input service which was used in non taxable/exempted service. Therefore, the cenvat credit availed on the input service attributable to the non taxable output service is required to be reduced from the total service tax paid on the output service - thus, the refund should be restricted by the amount of cenvat credit on the input service attributed to not taxable output service. Refund of interest paid on the service tax - Held that:- The service tax was admittedly refundable which is not in dispute even by the department. Therefore, even though there is no specific provision in the Section 102 but once service tax is not payable than the interest paid on such service tax also become refundable. The refund claim is to be restricted by the amount of cenvat credit in respect of input service attributed to non taxable construction service - The appellant is entitled for the refund of interest paid on service tax on the output service - appeal allowed in part.
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