TMI Blog2019 (6) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... cope of established law and therefore, calculation of Net Cenvat Credit and thus eligible refund was in order. We find that the appellants have submitted that while deciding the refund claims, the lower authority has dis-allowed certain credits without issuing a proper SCN and without hearing the contentions of the appellants and some credits were not allowed on procedural issues. We find that such a denial is incorrect. It is not free for the authorities to deny Cenvat credit without giving an opportunity of being heard to appellants. Therefore, for this purpose, the issue requires to go back to the original authority for deciding the issue separately by following the principles of natural justice. The appeals allowed by way of remand, to the extent of re-determination of inadmissible Cenvat credit. - ST/86111 & ST/86112/2015-MUM - A/86115-86116/2019 - Dated:- 14-6-2019 - Dr. D.M. Misra, Member (Judicial) And Shri P Anjani Kumar, Member (Technical) Appearance Shri S.A. Gundecha, Adv for Appellant Shri M. K. Sarangi, Jt (A.R) for Respondent Per : P. Anjani Kumar, Member (Technical) The Appellants, M/s John Deere India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e into force w.e.f. April, 2012. He submits that the expression Net Cenvat credit , as explained in Rule 5(1)(B), to mean (B) . Net CENVAT credit means total CEX2JT credit availed on inputs and input service by the manufacturer or the output service provider reduced by the amount reversed in terms of sub-rule (56) of Rule 3, during the relevant period consists of two parts; the first part deals with total Cenvat credit availed on input services by the output service provider and the second part deals with reduction in the total Cenvat credit, in terms of sub-Rule (5C) of Rule 3 of the Rules during the relevant period. It is pertinent to note that Rule 3(5C) of the Rule deals with remission of duty as per the provisions of Rule 21 of the Central Excise Rules, 2002 and thus is irrelevant in case of a service provider, who does not manufacture. Thus, the words during the relevant period are related to the second part of the said definition of net Cenvat credit and not to the first part of the said definition. 2.1. Learned Counsel for the appellants further submits that no one to one co-relation is required, in order to grant Cenvat credit or recover Cenvat credit as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be availed in quarter 1. But, if the export of output services occurs only in quarter 2, then taking the view, as taken by the lower Authorities, the amount of Cenvat credit cannot be claimed as a refund, in spite of the fact that admittedly the services availed by the exporter of services were input services, the duty/tax was paid and was to be refunded by appropriate means by the Government to the said exporter of services. It is pertinent to note that due to change in Rule 5 of the Rules, the earlier procedure of payment of Service Tax on services, to be exported and claiming rebate, was not available during the relevant period due to change in law/procedure. The refund of Cenvat credit as per the provisions of Rule 5 of the Rules was the only method to reimburse the tax on input services collected by the Central Government. It is pertinent to note that before submitting the claim the amount of Cenvat credit claimed as refund as per the provisions of Rule 5 of the Rules need to be debited to the Cenvat credit account being a pool account. It is also pertinent to note that if out of the pool of Cenvat credit, certain amount is used by an exporter subsequent to exports of relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I) Pvt. Ltd. 2015 (39) STR 673 (Tri-Mum) 3 Credit availed for a given month remains admissible in the preceding or succeeding months and in case of no dispute that goods have been exported and input services while calculating Cenvat Credit CCE Mysore Vs Chamundi Textiles (Silk Mills) Ltd. 2010 (20) STR 219 (Tri-Bang) 4 No benefit should be denied if substantive compliance is made and mandatory requirements are fulfilled for granting any exemption or benefit CCE New Delhi Vs. Hari Chand Shri Gopal 2010 (260) ELT 3 (SC) CCE Vs DCM 1990 (50) ELT 271(Tri) 5 When two views are possible one favourable to the assessee to be taken SRD Nutients Pvt Ltd Vs. CCE Guwahati 2017 (355) ELT 481 (SC) 6 Liberal approach to be adopted while granting refund of unutilized credit to the exporter Addi Industries Ltd Vs CCE, NOIDA 2018(9) GSTL 182 (Tri-All) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arified that that there should not be any objection in allowing refund of credit of the past period in subsequent quarters; the input credit taken in quarter during which there is no export is carried over to next quarter, and Explanation given in condition 5 to Notification No. 5/2006-CE (NT) to be viewed accordingly; in case of 100% EOU, refund to be granted irrespective of when has taken credit. (iv). Statutory provision up to June 2012, will not apply to refunds under the present Notification No.27/2012-CE (NT) in which Explanation has been included in Rule 5 of CCR,2004 itself, unlike earlier period. In view of the statutory bar under Rule 5(2) CCR.2004, for claim preferred after 1 April2013, exports prior to April2012 are not relevant. (v). Reliance on different circulars pertaining to different period, before amendment to Rule 5, will not be of any help to the appellants as the refund in their case is governed by New Rule 5 of CCR,2004. (vi). The appellants have relied on Case Laws in Global Energy Food Industries Ltd (Mar,09-Sept,09). Cararo Technologies India Pvt. Ltd (Apr,10-June,10), Pee Vee Textiles Ltd(July,02-Sept,02); in those cases, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service so used shall be allowed to be utilized by the manufacture or provider of output service towards payment of, (i) Duty of excise on any final product cleared for home consumption or for export on payment of duty; or (ii) Service Tax on output service, And where for any reason such adjustment is not possible, the manufacturer or the provider of output service shall be allowed refund of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification: Provided that no refund of credit shall be allowed if the manufacturer or the provider of output service avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims rebate of duty under the Central Excise Rules, 2002, in respect of such duty; or claims rebate of service tax under the Export of Service Rules, 2005 in respect of such tax. Provided further that no credit of the additional duty leviable under sub-section (5) of Section 3 of the Customs Tariff Act shall be utilized for payment of service tax on any output service. Explanation : For the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ENVAT credit means total CENVAT credit availed on inputs and input services by the manufacturer or the output service provider reduced by the amount reversed in terms of sub-Rule (5C) of Rule 3, during the relevant period; (C) Export turnover of goods means the value of final products and intermediate products cleared during the relevant period and exported without payment of Central Excise duty under bond or letter of undertaking; (D) Export turnover of services means the value of the export service calculated in the following manner, namely:- Export turnover of services = payment received during the relevant period for export services + export services whose provision has been completed for which payment had been received in advance in any period prior to the relevant period- advances received for export services for which the povision of service has not been completed during the relevant period; (E) Total turnover means sum total of the value of (a) All excisable goods cleared during the relevant period including exempted goods, dutiable goods and excisable goods exported; (b) Export turnover of services determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove interpretation is incorrect; it is apparent that so far as definition of net Cenvat credit is concerned, it consists of a difference of credit availed on input/input services as reduced by the amount pertaining to Rule 3 (5C) ibid which is necessarily followed by , before during the relevant period. We find that the formula given for the calculation of eligible refund and the definition of Net Cenvat Credit are very clear. It is obvious that during the relevant period applies to both the components. Therefore, we find that the contention of the Revenue is correct. We hold that the words during the relevant period apply both to the Net Cenvat Credit and the amounts referred to in Rule 3 (5C). We do not find any ambiguity in this regard. 5.5. Revenue also contends that as per proviso to sub-Rule (2) provided that the refund may be claimed under this Rule, as existing, prior to commencement of the Cenvat credit (Third Amendment) Rules, 2012, within a period of one year from such commencement. It has been postulated that credit pertaining to earlier period which was allowed under earlier rule can be claimed only till 1st April 2013. In the instant case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the notification. The five member Constitutional Bench of the Apex Court in the case of Commissioner of Customs (imports), Mumbai v. M/s Dilip Kumar Co. in Civil Appeal No. 3327 of 2007 held that: 20. In applying rule of plain meaning any hardship and inconvenience cannot be the basis to alter the meaning of the language employed by the legislation. This is especially so in fiscal statutes and penal statues .. 25. .. equity has no place in interpretation of a tax statute. Strictly, one has to look to the language used; there is no room for searching intendment nor drawing any presumption. 5.7. Following the ratio of the above decision, we find that quasi-judicial authorities are not expected to traverse beyond the scope of established law and therefore, calculation of Net Cenvat Credit and thus eligible refund was in order. We find that the appellants have submitted that while deciding the refund claims, the lower authority has dis-allowed certain credits without issuing a proper SCN and without hearing the contentions of the appellants and some credits were not allowed on procedural issues. We find that such a denial is incorrect. It is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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