2015 (4) TMI 1098 - AT - Service Tax

Rectification of mistake - Refund claim filed under Rule 5 of CENVAT Credit Rules, 2004 read with Notification No. 5/2006-ST by the appellant but adjudicating authority considered the claim s as per the provisions of Notification No. 41/2007 - Service tax paid on input services received & used in relation to manufacture - Held that - that the appellant had filed the claim of refund under Rule 5 of CENVAT Credit Rules be read as that the appellant had originally filed the refund claim under Notification No. 41/2007 but had subsequently prayed that the refund may also be considered under the provisions of Rule 5 of the CENVAT Credit Rules, 2004. In this view of the matter there is no mistake in the order of the Tribunal, except as taken notice of hereinabove. The adjudicating authority is directed to consider the refund claim under both the Notification No. 5/2006-ST and Notification No. 41/2007-ST, in view of the several decisions rendered by Tribunal & High Court

Summary

Issues:
1. Rectification of mistake in the final order regarding the rejection of a refund claim under Notification No. 5/2006-ST.
2. Interpretation of the claim of refund under Rule 5 of CENVAT Credit Rules, 2004.
3. Consideration of refund under Notification No. 41/2007-ST and Rule 5 of CENVAT Credit Rules, 2004.
4. Admissibility of the claim under Rule 41/2007 or under Rule 5 of CENVAT Credit Rules, 2004 read with Notification No. 5/2006-CE.

Analysis:
1. The Revenue filed an application for rectification of mistake in the final order, claiming that the refund claim under Notification No. 5/2006-ST was rejected by the Order-in-Original and Commissioner (Appeals). The Tribunal noted the contention of the assessee regarding the refund claims filed under Rule 5 of CENVAT Credit Rules, 2004. The Revenue argued that the rejection was due to the exporter being a manufacturer of exempted goods, not based on Rule 5 of CENVAT Credit Rules, 2004. The Tribunal found that the issue of the claim under Rule 5 was not addressed in the show-cause notice or the Order-in-Original.

2. The assessee raised the question of claiming a refund under Notification No. 5/2006-CE read with Rule 5 of CENVAT Credit Rules, 2004. The Commissioner (Appeals) disallowed the claim, stating that the refund is available to manufacturers or providers of output service, while the assessee was a manufacturer cum exporter of exempted goods. The Tribunal considered the legal point of whether the claim was allowable under Notification No. 41/2007 or Rule 5 of CENVAT Credit Rules, 2004 with Notification No. 5/2006-CE. The Tribunal allowed the rectification application in part and directed the adjudicating authority to consider the refund claim under both notifications.

3. The Commissioner (Appeals) had also considered the liability of refund under Rule 5 of the CENVAT Credit Rules and Notification No. 5/2006 CE, along with Notification No. 41/2007-ST. The contention was whether the claim should be allowed under Rule 41/2007 or under Rule 5 of CENVAT Credit Rules, 2004 read with Notification No. 5/2006-CE. The Tribunal clarified that the appellant had initially filed the refund claim under Notification No. 41/2007 but later requested consideration under Rule 5 of CENVAT Credit Rules, 2004.

4. The Tribunal emphasized that a point of law can be raised at any time and that the assessee had raised the issue in response to the show-cause notice. The rectification application was allowed to the extent indicated, and the adjudicating authority was directed to review the refund claim under both relevant notifications in light of subsequent decisions by the Tribunal and High Court.