2011 (2) TMI 28 - AT - Service Tax

Refund of cenvat credit - Business Auxiliary Service and Information Technology Software Services - respondents claimed refund of accumulated Cenvat credit in terms of Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 5/2006-CE - original authority rejected the refund sanctioned on the ground of limitation as well as on merits - order decided the dispute in favour of the respondents and remitted the matter to sanction refund claim to the extent made in time as per law subject to the assessee following the procedure prescribed by the CBEC - infirmity in the impugned order, Revenue s appeal rejected

Summary

Issues:
1. Competency of the Commissioner to pass remand orders under Section 35A (3) of the Central Excise Act, 1944.
2. Refund of accumulated Cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 5/2006-CE NT dated 14.03.2006.

Analysis:
1. Competency of the Commissioner to pass remand orders:
The Revenue filed appeals seeking to vacate orders passed by the Commissioner (Appeals) on the grounds that they were remand orders, questioning the Commissioner's authority to pass such orders. The Tribunal noted that under Section 35A (3) of the Central Excise Act, 1944, applicable to the Finance Act 1994, the Commissioner is empowered to pass orders confirming, modifying, or annulling decisions or orders appealed against. The Tribunal held that the Commissioner has the competence to make such decisions as deemed appropriate, indicating that the impugned orders should be set aside based on these provisions.

2. Refund of accumulated Cenvat credit:
The case involved M/s. Continuous Computing India Pvt. Ltd., a STPI unit engaged in exporting services falling under various categories. The company claimed a refund of accumulated Cenvat credit under Rule 5 of Cenvat Credit Rules, 2004, along with Notification No. 5/2006-CE NT dated 14.03.2006. The original authority rejected the refund for the first claim on grounds of limitation and merits, while partially granting the second claim. On appeal, the Commissioner (Appeals) upheld the rejection based on limitation but allowed the refund claim on merits, modifying the original orders. The Commissioner directed the sanction of refunds, subject to certain conditions, for the periods not barred by limitation. The Revenue challenged this decision, arguing that the Commissioner had remanded the dispute to the original authority.

3. Detailed Analysis of the Judgement:
The Tribunal considered arguments from both sides, with the Revenue contending that the Commissioner's order constituted a remand, while the respondent's representative, a Chartered Accountant, asserted that the Commissioner had not remitted the dispute but had decided in favor of the respondents. After reviewing the case records and submissions, the Tribunal found merit in the Chartered Accountant's arguments. The Tribunal concluded that the impugned order favored the respondents, directing the sanction of refunds for eligible periods as per the law and procedural requirements. Therefore, the Tribunal found no issues with the Commissioner's order and dismissed the Revenue's appeals.

In summary, the Tribunal upheld the Commissioner's competency to pass orders under Section 35A (3) of the Central Excise Act, 1944, and affirmed the refund of accumulated Cenvat credit to the respondents as per the modified orders issued by the Commissioner (Appeals), rejecting the Revenue's appeals challenging the Commissioner's decision.