2016 (7) TMI 1127 - AT - Service Tax

Refund of unutilized cenvat credit - export of services without taking registration - Rule 5 of Cenvat Credit rules 2004 read with Notfn No.5/2006-CE (NT) dt. 14.3.2006 - Held that - The contention of the respondent is that under Section 69 of the Finance Act, 1994 read with Rule 4 of Service Tax Rules, 1994, registration under service tax legislation is required only for service providers who are liable to pay service tax and the respondent herein is predominantly engaged in the provision of export of service and therefore they are not liable to pay service tax and consequently not required to register with the department. - Following the decision in the case of mPortal India Wireless Solutions Pvt. Ltd. 2011 (9) TMI 450 - KARNATAKA HIGH COURT , refund allowed as they are eligible for refund of the unutilized credit which was accumulated prior to registration. - Decided against the revenue.

Summary

Issues involved:
Refund claims for cenvat credit in relation to Business Auxiliary Service/Business Support Service; Denial of refund claims by adjudicating authority; Appeal before Commissioner (Appeals) challenging rejection of refund claims; Interpretation of Rule 5 of CCR 2004 and Notfn 5/2006 CE (NT); Dispute over registration requirement for claiming credit; Applicability of judicial precedents in similar cases.

Analysis:
The appeals before the Appellate Tribunal CESTAT Chennai involved refund claims for cenvat credit related to Business Auxiliary Service/Business Support Service. The respondent had filed refund claims for two periods, one for &8377; 8,64,159/- for March 2009 and the other for &8377; 42,72,807/- for October 2008 to February 2009 under Rule 5 of CCR 2004 read with Notfn 5/2006 CE (NT) dated 14-03-2006. The original authority partially sanctioned certain refund amounts but rejected others, citing reasons such as claims related to periods before registration and input services not used in output services.

The main issue revolved around the denial of refund claims based on the timing of invoices in relation to registration. The respondent argued that registration was not a mandatory requirement for claiming credit under Rule 5 of CCR 2004. The respondent relied on judicial precedents, including a ruling by the Hon'ble High Court emphasizing that the absence of a statutory provision mandating registration as a condition for claiming credit renders such denial unjustified. The Tribunal noted similar decisions in other cases supporting the respondent's position.

The Tribunal, considering the submissions and legal precedents, ruled in favor of the respondent-assessee. It held that the respondent was eligible for refund of unutilized credit accumulated before registration, aligning with the judgments of the Hon'ble High Court and previous decisions by the Tribunal in similar cases. However, the Tribunal upheld the rejection of certain refund claims related to input services not utilized in exported output services, as the appellant failed to demonstrate the utilization of the claimed amounts for export post a specific period.

In conclusion, the Tribunal upheld the impugned order, rejecting both Revenue's appeals. The ruling was based on the interpretation of relevant legal provisions, judicial precedents, and the specific circumstances of the case, emphasizing the importance of compliance with statutory requirements while allowing legitimate claims for refund of cenvat credit.