TMI Blog2023 (6) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... that in absence of any notice for recovery as provided by Rule 14 ibid the refund claimed by the assessee under Rule 5 cannot be denied. The decision of the Tribunal in the matter of Qualcomm India Pvt. Ltd. [ 2019 (8) TMI 1645 - CESTAT HYDERABAD] has been affirmed by the Hon ble High Court of Hyderabad in [ 2021 (11) TMI 72 - TELANGANA HIGH COURT] by dismissing the appeals filed by the revenue against the aforesaid decision of Tribunal. The authorities below have erred in rejecting the refund claim of the appellant. Accordingly the impugned orders are set aside and the appeals filed by the appellant are allowed. - Service Tax Appeal No. 87238 of 2019 Service Tax Appeal No. 87404 of 2019 - FINAL ORDER No : A/85920-85921/2023 - Dated: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the claim and rejected the amount of Rs. 12,27,622/- and Rs.12,16,116/- respectively on various grounds. Aggrieved, the appellant filed two separate appeals before the learned Commissioner (Appeals) who vide two separate impugned orders partially allowed by the appeals filed by the appellant and upheld the rejection of some of the refund claims and in total refund claim of Rs.18,52,430/- was rejected on various grounds. 4. Learned counsel appearing for the appellants raised a very relevant submission that Rule 14 of Cenvat Credit Rules, 2004 has not been invoked while rejecting the refund claim and therefore the authorities below have erred in rejecting the refund claim. In order to buttress this argument, learned counsel relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumulated Cenvat credit subject to compliance of the procedure/guideline laid down under the notifications issued thereunder. The refund of Cenvat credit on the services in issue was mainly denied to the Appellant on the ground of no nexus between the input services and the export services. The issue which falls for consideration in these Appeals is whether the department can deny refund of Cenvat credit under Rule 5 ibid alleging that there was no nexus between the output and input services. It is well settled legal position that denial of Cenvat credit can be done only by issuing notice under Rule 14 ibid. Having allowed the Cenvat credit or by not denying the same, the department cannot reject refund of Cenvat credit under Rule 5. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dering such amendment of Rule 5, the Tax Research Unit of Department of Revenue vide circular dated 16/03/2012 has clarified that the new scheme under Rule 5 does not require the kind of correlation that is needed at present between exports and input services used in such exports. Since the amended rule w.e.f. 01.04.2012 does not provide for establishment of nexus between the input and the output services and the benefit of refund is to be extended only on compliance of the formula prescribed therein, I am of the view that denial of refund benefit on the ground of non-establishment of nexus cannot be sustained, I find that this Tribunal in the case of Maersk Global Services Centres (I) Pvt. Ltd. (supra) has extended the refund benefit on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e input services and the output service provided by the service provider. Consequent upon substitution of the said Rule in the Union Budget- 2012, the Tax Research Unit (TRU) of CBEC vide letter dated 16.03.2012 has clarified as under:- F.1. Simplified scheme for refunds: 1. A simplified scheme for refunds is being introduced by substituting the entire Rule 5 of Cenvat Credit rules, 2004. The new scheme does not require the kind of correlation that is needed at present between exports and input services used in such exports. Duties or taxes paid on any goods or services that qualify as inputs or input services will be entitled to be refunded in the ratio of the export turnover to total turnover. 2. XX XX XX 4. On pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovides that the admissible refund will be proportional to the ratio of export turnover of goods and services to the total turnover, during the period under consideration and the net Cenvat Credit taken during that period. Indisputably, in the refund proceedings under Rule 5 ibid as amended, any such attempt to deny or to vary the credit availed during the period under consideration is not permissible. If the quantum of the Cenvat Credit is to be varied or to be denied on the ground that certain services do not qualify as input services or on the ground of no nexus , then the same could have been done only by taking recourse to Rule 14 ibid. 6. In view of the discussions made hereinabove in the preceding paragraphs, in my opinion sin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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