2024 (9) TMI 316 - AT - Service Tax

Refund of CENVAT Credit - part rejection on account that the address mentioned in the invoices were not the registered address of the appellants - whether the amount of refund claim of CENVAT credit rejected in the impugned order dated 08.03.2019 is eligible to be considered as refundable in terms of Rule 5 of the CENVAT Credit Rules 2004 or not? Denial of CENVAT Credit on the ground that such credit was not availed during the disputed quarter but in subsequent period - HELD THAT - It is found that the provisions of Rule 9(11) of the CCR 2004 in fact provide for submission of revised return to correct a mistake or omission within a prescribed period. It no where deals with taking of CENVAT credit which is governed under the Rule 3 of the CCR 2004. Further it is a settled position of law that those grounds which did not find mention in the show cause notice as well then the department cannot travel beyond the show cause notice. In the case of ASSISTANT COMMISSIONER COMMERCIAL TAX DEPARTMENT WORKS CONTRACT LEASING KOTA VERSUS M/S SHUKLA BROTHERS 2010 (4) TMI 139 - SUPREME COURT the Hon ble Supreme Court have held that the concept of reasoned judgement has become an indispensable part of basic rule of law and it is mandatory requirement for procedural law and that the reasoning for a decision should be recorded therein. Denial of CENVAT Credit - denial on the ground that the address mentioned in the invoices were not the registered address of the appellants - HELD THAT - The Co-ordinate Bench of the Tribunal in the case of GE INDIA EXPORTS (P) LTD. VERSUS COMMISSIONER OF C. EX. S.T. HYDERABAD-II 2017 (1) TMI 613 - CESTAT HYDERABAD have held that CENVAT credit cannot be denied on the ground of invoices having been issued on unregistered premises of the appellants. In the present case the CENVAT credit has been taken by the same assessee-appellant and therefore the ground of difference in the address/registered address appearing in the invoices on which the impugned order had rejected the CENVAT credit is not proper and justified. The impugned order is modified to the extent of allowing the appeal filed by the appellants in respect of refund of Rs.7, 83, 480/-being found as eligible CENVAT credit amount to be sanctioned to the appellants.

Summary

Issues Involved:
1. Eligibility of refund claim of CENVAT credit.
2. Difference between ST-3 Returns and refund claim filed.
3. Procedural delay in updating registered address.

Detailed Analysis:

1. Eligibility of Refund Claim of CENVAT Credit:

The appellants, engaged in providing Consulting Engineering services and Business Support Services, filed a refund application for unutilized CENVAT credit amounting to Rs.37,81,402/- for the period January 2017 to March 2017 under Rule 5 of the CENVAT Credit Rules, 2004. The jurisdictional Assistant Commissioner processed the claim and sanctioned Rs.28,61,349/-, rejecting Rs.9,20,053/- on various grounds. The appellants appealed the partial rejection, and the Commissioner (Appeals) allowed Rs.44,796/- but rejected Rs.7,83,480/-. The Tribunal found that the rejection of Rs.7,83,480/- was not justified and allowed the appeal for this amount.

2. Difference Between ST-3 Returns and Refund Claim Filed:

The appellants argued that the difference between the ST-3 Returns and the refund claim was due to permissible adjustments, and the CENVAT credit was availed based on invoices, not ST-3 Returns. The Tribunal agreed, citing Rule 9 of the CCR, 2004, which specifies that CENVAT credit is to be taken on the basis of invoices. The Tribunal also noted that the issue of difference in ST-3 Returns was beyond the scope of the show cause notice (SCN), referencing the case of CC, Mumbai vs Toyo Engineering India Limited, which established that an adjudication order cannot traverse beyond the SCN.

3. Procedural Delay in Updating Registered Address:

The appellants faced rejection of CENVAT credit on the ground that the address mentioned in the invoices was not the registered address. The Tribunal found that the appellants had shifted premises and updated their ST-2 Certificate accordingly. The Tribunal noted that there was no dispute regarding the use of input service in the provision of output service and cited the case of GE India Exports, which held that CENVAT credit cannot be denied on the ground of invoices issued to unregistered premises. The Tribunal concluded that the procedural delay in updating the address should not be a ground for denial of CENVAT credit.

Conclusion:

The Tribunal modified the impugned order to allow the appeal filed by the appellants, sanctioning the refund of Rs.7,83,480/- as eligible CENVAT credit. The Tribunal emphasized compliance with procedural law and the principles of natural justice, ensuring that the grounds for rejection must be clearly stated in the SCN and supported by law. The decision underscores the importance of adhering to legal provisions and established precedents in adjudicating refund claims.