2015 (2) TMI 1080 - AT - Customs

Denial of refund claim - Rule 5 of CENVAT Credit Rule - no nexus between the final product manufactured and the input services - Bar of limitation - Held that - The original authority had rejected a portion of the claim on the ground that the time limit under Section 11B is applicable and refund would be admissible only in respect of claims attributable to services on which tax was paid after 12.6.2006. Both sides agree that all the issues have been dealt with in Interim Order No.79-152/2014 dated 29.8.2014 passed by this Tribunal in the case of Apotex Research Pvt. Ltd. & Ors. vs. CCE and also agreed that the matter has to be remanded to the original authority to examine the refund claim and calculate the admissible amount and pay the same in the light of the decision of the Tribunal rendered supra. Therefore the impugned order is set aside and the matter is remanded to the original authority - Decided in favour of Revenue.

Summary

Issues:
Refund claims under Rule 5 of CENVAT Credit Rules, 2004 rejected; Nexus between final product and input services disputed; Appeal against refund allowed for consultancy and management services; Contesting refund rejection and limitation grounds; Remand for examination of refund claims based on Tribunal's decision.

Analysis:
The judgment by the Appellate Tribunal CESTAT Bengaluru pertains to the rejection of refund claims amounting to Rs. 5.25 lakhs filed by the appellants under Rule 5 of the CENVAT Credit Rules, 2004. The primary issue at hand was the establishment of a nexus between the final product manufactured and the input services for which the claims were made. The Commissioner (A) had allowed refund claims for consultancy and management services, leading to an appeal by the Revenue challenging this decision due to the perceived lack of nexus. Additionally, the appellant contested the rejection of certain refund claims and the imposition of limitations.

The Tribunal noted that all issues had been addressed in a previous interim order, directing a remand to the original authority for a thorough examination of the refund claims in line with the Tribunal's earlier decision. The impugned order rejecting the refund claims was set aside, emphasizing the need for the original authority to calculate the admissible amount and make payments accordingly. Given that several refund claims related to payments made in 2006, a strict timeline of three months was set for the original authority to resolve the matter. The respondent's counsel assured full cooperation in the process.

In conclusion, the judgment underscores the importance of establishing a clear nexus between input services and the final product for refund claims under the CENVAT Credit Rules. The decision highlights the need for a meticulous review of refund claims, adherence to statutory limitations, and timely resolution of such matters to ensure fair and efficient administration of tax refunds in line with legal provisions and precedents.