2010 (12) TMI 323 - AT - Service Tax

Refund claim - Exempted goods - export without claim of rebate or export was not under bond - refund of credit taken on input service under Rule 5 of CENVAT Credit Rules - services availed by the respondent are in respect of businesses and it was from the place of removal Refund claim allowed

Summary

Issues:
Refund claims under Rule 5 of CENVAT Credit Rules, 2004 and Notification No.41/2007-ST, dt.6.10.07; Denial of refund claims by Assistant Commissioner; Eligibility of CENVAT Credit for input service; Interpretation of place of removal in case of exports; Admissibility of refund when goods are not exported under bond; Applicability of decisions by different tribunals and High Courts; Interest on delayed payment of refund claim.

Analysis:
1. Refund Claims under Rule 5 of CENVAT Credit Rules, 2004 and Notification No.41/2007-ST: The respondents, engaged in manufacturing De-oiled cakes, filed refund claims under Rule 5 of CENVAT Credit Rules, 2004 and Notification No.41/2007-ST, dt.6.10.07. The Commissioner (Appeals) allowed the refund under Rule 5 but rejected the claim under the notification due to limitation. The Assistant Commissioner later proposed rejection of the refund claims, leading to a dispute. The Tribunal upheld the Commissioner's decision on Rule 5 but noted finality on the notification issue due to lack of appeal by respondents.

2. Eligibility of CENVAT Credit for Input Service: In the subsequent litigation round, the Assistant Commissioner questioned the eligibility of the CENVAT Credit for input service, citing that the services were beyond the place of removal. The Commissioner (Appeals) upheld this view, stating that the credit availed up to the place of removal is eligible under Rule 2(1) of CENVAT Credit Rules, 2004. The Revenue challenged this decision, arguing against the eligibility of credit for post-manufacture activities.

3. Interpretation of Place of Removal in Case of Exports: The Revenue contended that the goods were not exported under bond, hence refund was inadmissible. However, the Tribunal referenced decisions by High Courts and observed that credit is available for input/input services used in manufacturing exempted goods if exported. The Tribunal rejected the Revenue's stance on the bond requirement for exports.

4. Applicability of Decisions by Different Tribunals and High Courts: The Tribunal considered various decisions cited by both parties, emphasizing decisions supporting the eligibility of credit for services used in business activities related to manufacturing and clearance of final products. The Tribunal also highlighted the relevance of decisions regarding the place of removal in cases of exports on FOB basis.

5. Interest on Delayed Payment of Refund Claim: The respondents claimed interest on delayed payment of refund, but the Tribunal noted that as the appeals were filed by the Revenue, the issue of interest could not be raised by the respondents. Additionally, since no cross-objection was filed by the respondents, the matter of interest was not considered in the appeals.

In conclusion, the Tribunal found no merit in the appeals filed by the Revenue and rejected them based on the detailed analysis of the issues surrounding the refund claims, eligibility of CENVAT Credit, interpretation of place of removal in exports, and the applicability of various legal decisions.