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2017 (4) TMI 997 - CESTAT HYDERABAD

2017 (4) TMI 997 - CESTAT HYDERABAD - TMI - CENVAT credit - input services - case of Department is that the Commissioner (Appeals) has relied upon the judgment passed in the case of M/s Kyocera Wireless (I) Pvt. Ltd Vs Commissioner of S. Tax, Bangalore in [2014 (9) TMI 1036 - CESTAT BANGALORE]. The said order is only an interim order passed by the Tribunal and does not have any precedent value and therefore Commissioner (Appeals) ought not to have relied upon such interim order to allow the cred .....

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espondent/assessee is not barred from taking credit in terms of Rule 9(1)(bb) for the reason that Rule 9(1)(bb) bars the availment of credit when the service tax is paid pursuant to the notice issued alleging fraud, suppression of facts and wilful misstatement - credit allowed. - Validity of remand order - Although the Commissioner (Appeals) remanded the matter to adjudicating authority for reconsideration of the issue of eligibility of credit, there is no specific direction made for the rem .....

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016 & ST/30139/2016 - Dated:- 15-2-2017 - Ms. Sulekha Beevi, C.S., Member (Judicial) Sh. Nagaraj Naik, Deputy Commissioner (AR) for the Appellant Sh. S. Thirumalai, Advocate for the Respondent ORDER [ Order Per Sulekha Beevi, C. S. ] 1. The above appeals are filed by the department against the order passed by Commissioner (Appeals) who held the credit on certain input services to be eligible for refund, and also remanded the said issues to the adjudicating authority for denovo adjudication. 2. O .....

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w the credit/refund. 3. The second contention put forward by department is that the respondent/assessee has paid the service tax on various services under reverse charge mechanism. That this service tax was paid with much delay after being pointed out in audit. The appellants have then taken credit of this service tax which was paid belatedly. That the appellants ought not to have taken credit or applied for refund of the service tax that was paid belatedly. Further, these services do not have n .....

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nnot be allowed. That in the present case, the respondents had not paid the service tax within prescribed time and that this itself would evidence fraud, suppression of facts on the part of respondents. 4. The third contention put forward by the Department is that although the Commissioner (Appeals) remanded the matter to adjudicating authority for reconsideration of the issue of eligibility of credit, there is no specific direction made for the remand. 5. Fourthly, the Commissioner (Appeals) ha .....

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ner (Appeals) has wrongly held the respondents to be eligible for credit/refund, and the remand of the matter is also not proper. 7. Against this, the Ld. Counsel Sh. S. Thirumalai submitted that the Commissioner (Appeals) has analysed the facts, and evidence in the case in detail and held that the services are eligible for credit/refund. In respect of the credit taken on the service tax which was paid belatedly under reverse charge mechanism, the Ld. Counsel relied upon the circular No. 120/1-2 .....

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rtment that the appellant is barred from taking credit of the said service tax under Rule 9(1)(bb), is without basis. That Section 73 (4A) does not speak about fraud, suppression of facts or wilful mis-statement. Further, that although the Commissioner (Appeals) had placed reliance upon the interim order passed in M/s Kyocera Wireless (I) Pvt. Ltd., (supra) the subject services have been held to be eligible for credit/refund, on the basis of various Judgments of the Tribunal. The Ld. Counsel rel .....

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mmissioner (Appeals) has made discussions about the said interim order, he has held the credit to be admissible not solely basing upon this interim order. All the said services have been held to be eligible for credit by various judgments of the Tribunal including the Final Order of this Tribunal cited (supra). Further, the Commissioner (Appeals) has only remanded the matter for reconsideration by the adjudicating authority. Therefore, I hold this ground put forward by the Department as unaccept .....

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aid issue and held in favour of assessee. The relevant portion of the Final Order is reproduced as under: 5. On behalf of the department, the Ld. AR Shri. P.S. Reddy reiterated the findings in the Impugned Order. He submitted that the credit was availed on the basis of the invoices for foreign agent commission service dated.01.03.2010, 10.11.2010 and 25.03.2011. That the period of refund claim pertains to February, 2012 & March, 2012. That as the invoices are for past period, the appellant i .....

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faced in availing the benefit of refund of accumulated credit under the scheme prescribed under Notification No. 5/2006-CE (NT), dated. 14.03.2006, issued under rule 5 of the CENVAT Credit Rules, 2004. While certain issues germinated from the wordings used in the provisions of the notification or interpretation of such provisions, other issues were more in the nature of administrative difficulties in operating the scheme. As an immediate measure, CBEC issued a clarificatory circular No.120/01/2 .....

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s/illustration provided in the notification, the same is being amended retrospectively (w.e.f. 14.03.2006) (Clause 73 of the Finance Bill, 2010 refers) so as to resolve the disputes in respect of pending cases as well. Therefore to visualize the entire revamped and simplified refund scheme, both the amending notification and the Finance Bill provision must be read in conjunction. A note on the issue is enclosed as Annexure C. Refund of accumulated CENVAT credit to exporters: Amendments in Notifi .....

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of the Finance Bill, 2010 while the prospective changes are contained in Notification No. 7/2010-Central Excise (Non Tariff) dated the 27th February, 2010. Both these documents may be carefully read together for appreciating the full impact of the changes. The salient features of these changes are as follows: Retrospective changes effected from 14.03.2006 (i.e. from the date of issue of notification) 1) The words in relation to have been added in main condition (a) of the Notification. 2) The wo .....

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od prior to the quarter/period for which the refund has been claimed is also eligible for refund. The refund claims should be calculated only on the basis of the ratio of the export turnover to the total turnover of the claimant. Thus, if the CENVAT credit available to the exporter at the end of the quarter, or month, as the case may be, is ₹ 1 crore, and the ratio of export to total turnover during the quarter is 50%, then ₹ 50 lakh should be refunded to the exporter. The essence of .....

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