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2017 (1) TMI 499 - AT - Service TaxRefund of accumulated CENVAT credit - Rule 5 of CCR, 2004 - Held that - Appellant exports all its output services. Even if there is a lag in claiming the refund of credit availed in a different quarter, there is no reason to hold that such credit pertains to goods that were not exported and hence not eligible for the refund - A construction of paragraph 4 of the N/N. 5/2006-CE (NT) dated 14th March 2006, in the disposal of refund claim of appellant, is in conflict with rule 5 of CENVAT Credit Rules, 2004 to the detriment of the appellant-exporter and imposes conditions that are not envisaged in the said rule. Consequently, the denial of the claim for refund by the two lower authorities cannot sustain - refund granted - appeal allowed - decided in favor of appellant.
Issues: Refund of accumulated CENVAT credit for exported services.
Analysis: 1. The appellant, an exporter of information technology software and design services, sought a refund of accumulated CENVAT credit. The original authority restricted the refund amount based on the ST-3 returns, leading to an appeal against the decision. 2. The appellate tribunal examined the provisions of rule 5 of CENVAT Credit Rules, 2004, and Notification no. 5/2006-CE (NT) dated 14th March 2006, which govern the refund claims for exporters. The tribunal noted that the lower authorities misinterpreted the rules by restricting the refund to the credit availed during the quarter relevant to the export. 3. The tribunal emphasized that the appellant exported all its output services, and any delay in claiming the refund should not disqualify the credit attributed to the exported goods. The lower authorities' decision to deny the refund for a specific quarter was deemed incorrect and conflicting with the CENVAT Credit Rules. 4. By applying the principle that taxes are not exported but refunded for exports, the tribunal overturned the impugned order and allowed the appeal, granting the appellant the refund amount of ?5,46,888. The decision highlighted the importance of interpreting tax statutes and rules in line with the objective of facilitating exports and ensuring fair treatment for exporters.
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