2018 (2) TMI 544 - AT - Central Excise

100% EOU - refund in cash of unutilized CENVAT credit - Held that - there is no dispute of the fact that this credit is accumulated in the books of accounts of the appellant on account of export of the goods and they filed refund of cash credit periodically relevant to the particular quarter - theirs is an 100% EOU and the total amount of refund mentioned as Rs. 64, 78, 444/- which had been claimed on the ground that the said credit could not be utilized for domestic clearances therefore restricting the refund to the particular quarter is unsustainable in law - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Dispute over refund of accumulated cenvat credit for two quarters.
2. Appellant's challenge to the restriction of cash refund amount.
3. Revenue's appeal against credit of service tax paid on various services.
4. Interpretation of input services under Rule 2(l) of Cenvat Credit Rules.
5. Nexus between services and manufacturing activity for eligibility of credit.
6. Compliance with Form A under Rule 5 of the Cenvat Credit Rules.
7. Applicability of Notification No.27/2012-CE(NT) dated 18.06.2012 on refund claims.

Analysis:
1. The case involves two appeals by the assessee and the Revenue challenging the same order-in-appeal regarding the refund of accumulated cenvat credit. The appellant, a 100% EOU, filed refund claims for two quarters, which were partially rejected by the Adjudicating Authority. The Ld. Commissioner (Appeals) allowed some refund but restricted the amount for one quarter, leading to appeals by both parties.

2. The Revenue's appeal questioned the eligibility of credit for service tax paid on various services, arguing a lack of nexus with manufacturing activity. However, the Tribunal cited precedents, including the case of Reliance Industries Ltd., to support the classification of these services as input services. Consequently, the Revenue's appeal was rejected.

3. The appellant contested the restriction of cash refund to a specific quarter, arguing that the credit was accumulated due to export activities and should not be limited to a single quarter. The Ld. Commissioner (Appeals) upheld the restriction based on Form A requirements and a specific notification. The Tribunal agreed with this decision, dismissing both the appellant's and Revenue's appeals.

4. The judgment emphasized the importance of complying with Form A under the Cenvat Credit Rules and the relevant notification for refund claims. Despite the appellant's argument regarding the nature of accumulated credit, the Tribunal upheld the decision to restrict the refund amount. This ruling highlights the significance of accurate documentation and adherence to regulatory provisions in refund cases.

5. Overall, the judgment clarifies the criteria for refund claims related to cenvat credit and underscores the need for strict adherence to prescribed forms and notifications. The decision provides guidance on the interpretation of input services, the nexus between services and manufacturing activities, and the limitations on refund amounts based on regulatory requirements. By addressing these issues, the Tribunal ensures consistency and compliance in matters concerning cenvat credit refunds.