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2016 (3) TMI 1148 - AT - Service TaxRefund claim - appellant availing Drawback claim - appellant was also availing inputs service credit on services namely CHA or Courier services - As the Drawback Rules (ibid) did not deal input service credit, therefore, the appellant filed refund claims of input services credit remained un-utilisation in their Cenvat credit account under Rule 5 of the Cenvat Credit Rules, 2004 for the period 1-6-2006 to 15-7-2006 - Held that - I find that till 13-7-2006 while calculating the amount of drawback, the component of duty paid on excisable goods was considered, no element of input service credit was taken into consideration while calculating drawback - In these circumstances, refund claim cannot be denied on the ground that the appellant is claiming drawback, therefore, they are not entitled to claim refund of input service credit. Therefore, I hold that the appellants are entitled to claim refund of input service credit lying unutilized for the period up to 13-7-2006 under Rule 5 of the Cenvat Credit Rules, 2004. The other ground of rejection of refund claim of input service credit was that, there is no prescribed procedure for filing the refund claim during the relevant period - Held that - the substantive benefit under Rule 5 of the Cenvat Credit Rules, 2004 cannot be denied to the appellant in the absence of the procedure prescribed for filing the refund claim. CENVAT credit - CHA and Courier Service - denial on the ground that they are availed beyond the place of removal of the goods - Held that - the appellant is entitled to avail Cenvat credit on input service credit namely CHA and Courier Services which have been availed by the appellant in the course of their business to export of goods, further, I find that in the case of ABB Ltd. 2011 (3) TMI 248 - KARNATAKA HIGH COURT , it was held by the Hon ble High Court of Karnataka that for the period prior to 1-4-2008, the assessee entitled to avail Cenvat credit on the service tax paid on the services beyond the place of the removal of goods. Appeal allowed - decided in favor of appellant.
Issues:
1. Denial of refund of input service credit under Rule 5 of the Cenvat Credit Rules, 2004. Detailed Analysis: The appellant challenged the impugned orders denying the refund of input service credit under Rule 5 of the Cenvat Credit Rules, 2004. The appellant, engaged in manufacturing excisable goods and exporting them, claimed drawback under the Customs and Central Excise Duties Drawback Rules, 1995, for duty paid on inputs. However, as the Drawback Rules did not address input service credit, the appellant filed refund claims for unutilized input service credit under Rule 5 for the period 1-6-2006 to 15-7-2006. The refund claims were rejected on the basis that courier and CHA services were availed beyond the place of goods removal, and no prescribed procedure existed for claiming input service credit refund during that period. The appellant contended that prior to 13-7-2006, drawback only included duty paid on excisable goods, and they were entitled to claim the refund in light of relevant legal decisions. The ld. Counsel for the appellant argued that despite the absence of a prescribed procedure for claiming the refund of input service credit, the substantive right to claim the refund could not be vitiated during the relevant period. They cited legal precedents supporting their claim, emphasizing that services availed beyond the place of goods removal were eligible for input service credit. The appellant sought to set aside the impugned orders and requested relief. The ld. AR for the respondent reiterated the findings in the impugned order, stating that since the appellant was claiming drawback on exported goods, they were not entitled to the refund of input service credit. After hearing both parties and considering their submissions, the Tribunal analyzed Rule 5 of the Cenvat Credit Rules, 2004, and the definitions of drawback before and after the amendment on 13-7-2006. The Tribunal noted that till 13-7-2006, input service credit was not considered in calculating drawback, as observed in the case of Sabare International. The Tribunal concluded that the appellant was entitled to claim the refund of input service credit up to 13-7-2006 under Rule 5. Regarding the absence of a prescribed procedure for filing the refund claim during the relevant period, the Tribunal referred to the case of Fibre & Fabrics International P. Ltd., emphasizing that the rule itself provided for the utilization of input credit and input service credit, even if a specific notification was not issued. The Tribunal held that the appellant could not be denied the benefit under Rule 5 due to the lack of a prescribed procedure. Additionally, the Tribunal ruled in favor of the appellant regarding the entitlement to Cenvat credit on input service credit for services availed up to the port of export, as supported by legal precedents. In conclusion, the Tribunal found no merit in the impugned orders and set them aside, allowing the appeals with consequential relief. The appellant was granted the refund of input service credit for the relevant period, and their entitlement to Cenvat credit on services availed for export was upheld based on legal interpretations and precedents cited during the proceedings.
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