2016 (5) TMI 180 - AT - Service Tax

Refund claim - Rejected on ground of (a) invoices on which credit has been availed and refund claim pertaining to unregistered premises, (b) inputs invoice on which refund claimed does not pertain to the claim period and (c) ineligible input services - export of services - Cenvat credit in respect of unutilized input credit was accumulated in the record of the assessee and when refund thereof was claimed, the said was disallowed by the adjudicating authority. Held that - there is no dispute that export of goods and services are not taxable and registration is not a criteria to allow refund when the output service is not liable to duty or tax. By following the decision of Hon ble Karnataka High Court in the case of mPortal India Wireless Solutions P. Ltd. Vs CST Bangalore 2011 (9) TMI 450 - KARNATAKA HIGH COURT , limitation under Section 11B does not apply to refund of accumulated cenvat credit and therefore bar of limitation cannot be a ground to reject refund of cenvat credit to the assessee. Therefore, the appeal is allowed in so far as the aspect of additional premises is concerned. The submissions of both the sides, are at factual variance in as much as the appellant had contended that they had shifted their business premises to a new address and the respondent revenue contends that they had registered with the department only on 25-05-2010. The above stated judgment is wide enough to cover both the situations and therefore, whatever is the factual situation, that would not in any way alter the eligibility for refund. The pre-registration issue settled in favour of the appellant. Regarding the third issue of ineligible input services, it is found that the services have been received in respect of Customs Clearing Services received for the goods imported relating to their business and therefore qualify as an eligible input service for the purpose of availment of credit as the said services are for inward transportation of inputs. Therefore, the impugned order is set aside. - Decide in favour of appellant

Summary

Issues involved:
1. Refund claims rejection on various grounds by the adjudicating authority and Commissioner (Appeals).
2. Eligibility of input services for refund claims.
3. Registration requirements for claiming Cenvat credit.
4. Applicability of Section 11B limitation on refund of accumulated Cenvat credit.

Detailed Analysis:
1. The appellant, a service provider registered with Software Technology Park of India (STPI), filed refund claims under Rule 5 of CCR 2004 for unutilized service tax paid on input services used for providing export services. The adjudicating authority and Commissioner (Appeals) rejected some refund claims citing reasons like availed credit on invoices, unregistered premises, and ineligible input services. The appellant argued that Rule 5 of CCR 2004 does not impose such conditions and relied on judicial precedents to support their contention that Section 11B does not apply to refund of accumulated unutilized Cenvat credit.

2. The issue of ineligible input services arose concerning Customs Clearing Services, which the Commissioner (Appeals) deemed not directly used for providing output services. The appellant contended that these services qualify as eligible inputs, citing a broad definition of "input service" during the disputed period and referring to relevant judicial decisions supporting their claim.

3. The registration requirement for claiming Cenvat credit was debated, with the Revenue arguing that the appellant's premises were registered after a specific date, making them ineligible for credit as per Rule 3 of the CCR and Notification No.5/2006-CE (NT) dt. 23.2.2006. The appellant, however, argued that registration is not a prerequisite for refund when the output service is not taxable, citing the judgment of the Hon'ble Karnataka High Court.

4. The applicability of Section 11B limitation on refund of accumulated Cenvat credit was a crucial aspect. The Tribunal referred to the judgment of the Hon'ble Karnataka High Court, which held that the time limit does not apply to such refunds. The Tribunal ruled in favor of the appellant, stating that the limitation under Section 11B does not bar the refund of accumulated Cenvat credit, irrespective of registration timing, as long as the output service is not taxable. The judgment was considered applicable to both situations presented, and the appellant's appeal was allowed on all issues, setting aside the impugned order.