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2021 (12) TMI 1015 - AT - Service TaxRefund of tax paid - rents charged on the space which remained unregistered as premises from which ‘output service’ was rendered - after examining the two claims for refund, the file was sent for ‘pre-audit’ and objection, of wrongful availment of credit of tax on rentals paid by the assessee, originating there prompted rejection of the claims- rule 5 of CENVAT Credit Rules, 2004 - HELD THAT:- The scheme of rule 5 of CENVAT Credit Rules, 2004 is abundantly clear. To the extent of eligibility, the assessee cannot be denied refund and the disallowed portion, if any, remains in the credit of the assessee for debit of future tax/duty liability. Therefore, denial of refund does not extinguish the credit but restores it in the account. In the impugned order, there is no finding of disallowance and, on the contrary, the denial has been on the ground of ineligibility for CENVAT credit which is permissible to be ordered only in proceedings initiated under rule 14 of CENVAT Credit Rules, 2004 after issuing notice to the assessee. Neither of the two is evident in the records. The denial of refund CENVAT credit is incorrect in law in the absence of recovery of credit for ineligibility - Appeal allowed - decided in favor of appellant.
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