2015 (9) TMI 782 - AT - Service Tax

Refund - unutlized cenvat credit - export of goods - Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 41/2007-S.T. - nexus of input services with export of goods - Held that - As the documents are not generated at single point of time but are generated in the course of various stages of trade and as such if the same are taken together as a whole, the evidences of export and utilization of export service is established beyond doubt. Thus, the rejection of the claim on the basis of some information not available in some documents, is not tenable and also not a requirement of Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 41/2007. The evidence of export has not been doubted and what is doubted is that some information not available on some invoices like in the case of invoices of the exporter not bearing the shipping bill no. and exporter invoices no. - this not a discrepancy as such invoices are generated at the later point of time. Where the exporter is not a manufacturer, he only has to satisfy that neither Cenvat credit has been taken by the manufacturer or by him not the manufacturer have separately applied for refund with respect to the same taxes, which the appellants have done in support of its claim. - matter remanded back - adjudicating authority directed to reconsider the claim of refund - Decided iin favor of assessee.

Issues Involved:
1. Rejection of refund claim under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 41/2007-S.T.
2. Compliance with the conditions set out in Notification No. 41/2007-S.T.
3. Submission and adequacy of documentary evidence.
4. Interpretation of Notification No. 41/2007-S.T. in relation to the eligibility for refund claims.
5. Procedural lapses and their impact on refund claims.

Detailed Analysis:

1. Rejection of Refund Claim Under Rule 5 of the Cenvat Credit Rules, 2004 Read with Notification No. 41/2007-S.T.:
The appellant, a merchant exporter, filed an appeal against the rejection of their refund claims for the periods April to June 2008 and October to December 2008. The refund claims were made under Rule 5 of the Cenvat Credit Rules, 2004, read with Notification No. 41/2007-S.T. The claims were initially denied by the adjudicating authority and upheld by the Commissioner (Appeals) on the grounds that the appellant did not fulfill all the conditions stipulated in the notification.

2. Compliance with the Conditions Set Out in Notification No. 41/2007-S.T.:
The primary condition under scrutiny was whether the appellant had met all the requirements of Notification No. 41/2007-S.T. The notification mandates that the exporter must have actually paid the Service Tax on the specified services used for export. The adjudicating authority found discrepancies such as the absence of export invoice details on the service provider's invoices and the lack of evidence for Service Tax payment by the transporter. Additionally, the appellant relied on a disclaimer certificate from the manufacturer, which was deemed not in order under Para 2(a) of the notification.

3. Submission and Adequacy of Documentary Evidence:
The appellant submitted various documents, including invoices, shipping bills, and a disclaimer certificate from the manufacturer. The adjudicating authority and the Commissioner (Appeals) found these documents insufficient, citing missing details and the lack of correlation between the invoices and the exported goods. The Tribunal, however, noted that the evidence of export was not disputed and that minor procedural lapses should not result in the denial of the refund claim.

4. Interpretation of Notification No. 41/2007-S.T. in Relation to the Eligibility for Refund Claims:
The Tribunal emphasized a liberal interpretation of the notification, as supported by the Apex Court ruling in Commissioner of Customs v. Malwa Industries Ltd. The Tribunal held that the notification should be read harmoniously, allowing the refund claim if the exporter can prove that the Service Tax was paid on the services used for export, even if some procedural details were missing. The Tribunal also referenced the case of Jumbo Mining Ltd., where broad correlation of documents was deemed sufficient to establish the eligibility for refund claims.

5. Procedural Lapses and Their Impact on Refund Claims:
The Tribunal acknowledged that procedural lapses, such as missing details on invoices, should not be grounds for rejecting the refund claim if the overall evidence supports the claim. The Tribunal directed the adjudicating authority to reconsider the refund claim with a broader view, allowing the appellant to submit additional documents and evidence to substantiate their claim.

Conclusion:
The Tribunal remanded the case to the adjudicating authority with instructions to reconsider the refund claim in light of the Tribunal's observations and the precedent set by the Jumbo Mining Ltd. case. The appellant was directed to appear before the adjudicating authority within six weeks with all relevant documents to support their claim, and the adjudicating authority was instructed to pass a speaking order based on the comprehensive review of the submitted evidence.

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