2019 (6) TMI 1522 - AT - Service Tax

Refund of unutilized CENVAT Credit - export of services under the category of Scientific and Technical Consultancy services to the principal located outside India in USA - refund denied on the ground that the appellant does not have any receipt and/or billing for export of services during the said quarter - HELD THAT - The appellant at the stage of first adjudication for the third quarter, Order-in-original dated 9.6.2010, has stated this fact, which is recorded in para 11(2) of the said order, that the amount of ₹ 50,000 USD relates to 2nd quarter and out of which, 30,000 USD relates to the third quarter. Accordingly, it is found that the rejection of the refund claim is bad. Accordingly, the impugned order is set aside and the appeal is allowed by way of remand to the Adjudicating Authority for the limited purposes of verifying the aforementioned bill which has been raised for the two quarters, as the copy of the same is not available before this Tribunal.

Summary

Issues:
Challenge to rejection of refund claim under Rule 5 of Cenvat Credit Rules for the period October to December, 2016.

Analysis:
The appellant, engaged in Scientific and Technical Consultancy services, filed a refund claim for unutilized cenvat credit due to exporting 100% of their services. The claim was rejected as they lacked receipts for services exported during the relevant quarter. The Commissioner (Appeals) upheld the rejection, noting the absence of billing for the third quarter, implying no services were exported then. The appellant contended they had export turnover in the fourth quarter, and that refund should be proportionate to export turnover. The Tribunal observed a bill related to both the second and third quarters, overturning the rejection and remanding the case for verification.

The appellant's counsel referenced Rule 5 of Cenvat Credit Rules, highlighting the definition of "Export Turnover of Services." They clarified that services worth $20,000 were rendered in the second quarter and $30,000 in the third quarter, mistakenly disclosed as $50,000 for the second quarter. The rejection of the refund claim was challenged on factual and legal grounds, asserting no basis for disallowing the claim due to exporting all services. The Tribunal found the rejection unjustified, setting aside the impugned order and remanding the case for verification of the bill covering both quarters.

The Tribunal, after considering arguments from both sides, found the rejection of the refund claim unjustified. Noting the bill related to both the second and third quarters, the Tribunal set aside the impugned order and remanded the case for verification. If the bill indeed covered both quarters, the refund was to be allowed with interest. The appellant was directed to appear before the Adjudicating Authority with a copy of the Tribunal's order for further proceedings.