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2015 (7) TMI 431 - CESTAT MUMBAI

2015 (7) TMI 431 - CESTAT MUMBAI - TMI - Denial of refund claim - Refund of unutilized CENVAT Credit - whether the appellant is eligible for the refund of an amount availed as Cenvat credit on the inputs services which were received by the appellant during the period April 2005 to September 2006 for providing output services which are exported. - Held that:- rule 5 which not provide for refund of unutilized credit to the producer of output services got substituted during relevant time - Once the .....

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nt : Shri K S Mishra, Addl. Comm (AR) ORDER Per: M V Ravindran: This appeal is filed by the assessee against Order-in-Appeal No. SB (48-49) 48-49/STC/2010 dated 06.05.2010. 2. The issue involved in this case is regarding the rejection of refund claim filed by the appellant assessee under the provisions of Rule 5 of CENVAT Credit Rules, 2004. 3. The appellant had filed a refund claim on the ground that they were not in a position to utilise the Cenvat credit of service tax taken on input services .....

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ed by such order, appellant preferred an appeal before the first appellate authority. The first appellate authority in the impugned order held against the assessee on the ground that they had not produced any documentary evidence and that the Cenvat credit of the input services were received by the appellant prior to the registration of their unit as a service provider. 4. Ld. counsel appearing on behalf of the appellant brings to our notice the finding recorded by the Adjudicating Authority as .....

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efund claim as held by the Adjudicating Authority has been upheld by the first appellate authority on one more ground that Notification no. 4/2006 dated 14.03.2006 allows exporter to claim refund and should have been applied as a clarificatory nor the appellant is eligible to the refund of the amount as output service provider. He would draw our attention to the findings recorded and submits that the issue is now squarely covered by the decision of the Tribunal in WNS Global Services (P) Ltd. 20 .....

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earlier provision only a manufacturer could have claimed the refund for the unutilised Cenvat credit. He would submit that both the lower authorities were correct in the finding recorded by them. Ld.AR would also rely upon the Maxwell on the Interpretation of Statutes' and submitted that if any Notification is to be perceived as retrospective in nature it should be expressly mentioned in the said Notification and would draw our attention to the portion as to the interpretation of retrospecti .....

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6. We have considered the submissions made at length by both sides and perused the records. 7. The issue to be decided in this case is whether the appellant is eligible for the refund of an amount availed as Cenvat credit on the inputs services which were received by the appellant during the period April 2005 to September 2006 for providing output services which are exported. 8. Undisputedly, appellant herein is a provider of services and exports the output service Banking and Financial services .....

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said finding of the Notification 4.06 dated 14.03.2006 and 5/06 dated 14.03.2006 is not applicable retrospectively. 10. We find that the argument made by the ld. Departmental Representative and the reasoning recorded by the first appellate authority on this point are erroneous. First and foremost, it is seen and undisputed that appellant is eligible to avail Cenvat Credit of the input service which has been used by him for providing output services, which are exported. Secondly, we find that an .....

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s it existed during the period April 2005 to March 2006 and the present provisions as substituted by Notification No. 4/06. For this purpose it would be relevant to reproduce the Rule 5 as it existed during the tow periods: April 2005 to March 2006 : "5. Refund of CENVAT credit - Where any input or input service is used in the final products which is cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate products cleared for export, or used i .....

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onditions 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 provider of output service avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims a rebate of duty under the Central Excise Rules, 2002, in respect of such duty; Provided farther that no credit of the additional duty leviable under subsection (5) of section 3 of the Customs Tariff Act .....

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the intermediate product cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer 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 provid .....

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the Export of Service Rules, 2005 in respect of such tax. Provided further that no credit of the additional duty leviable under subsection (5) of section 3 of the Customs Tariff Act shall be utilised for payment of service tax on any output service. Explanation:- For the purposes of this rule, the words 'output service which is exported' means the output service exported in accordance with the Export of Services Rules, 2005." It is noticed from the comparison of the two provisions .....

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alone was allowed refund of unutilized cenvat credit subject to such safeguards, conditions and limitations as may be specified by the Government of India by Notification and not the service provider as is the case under substituted Rule 5. It has been argued on behalf of the appellant that the intention of the government has all along been not to charge duty in respect of the services exported by them and even during the relevant period a provider of output services was entitled to rebate of i .....

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draw back under Customs and Central Excise Duties Drawback Rules, 1995. Whereas the fact is that the Customs and Central Excise Duties Drawback Rules, 1995 as It stood prior to 14.3.2006 provide for drawback only in respect of the goods exported and did not provide drawback in respect of services exported. It was only with effect from 13.7.2006 that the drawback rules provide for drawback of service tax paid on input services also used in the manufacture of goods exported. Therefore, there is n .....

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t Rules, 2004 does not make any distinction between exports made prior to 14-3-2006 or after 14-3-2006. IN other words, as per the substituted Rule 5 refund of unutilized cenvat credit in respect of exports effected in the past is available to the manufacturer as well as provider of output service. Proviso to Rule 5 as it stood prior to the amendment on 14-3-2006 clearly provides that refund of unutilized credit is available to the manufacturer as also by the provider of output service subject t .....

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