2017 (1) TMI 1319 - AT - Service Tax

Refund of unutilised credit - export of service - Circular No. 20/01/2010-ST, dated 19.01-2010 - Held that - the authority should re-calculate the refund admissible to the appellant taking into consideration the carried forward refundable amount as well as accrued refund of the respective quarter. The calculation should not deprive the appellant from the relief admissible in the respective quarter giving due regard to the spirit of the Board circular. The authority should also keep in mind that in Cenvat credit jurisprudence, there is one-to-one relation and indefeasible right undeniable as has been held in the case of Collector of Central Excise, Pune Vs Dai Ichi Karkaria Ltd 1999 (8) TMI 920 - SUPREME COURT OF INDIA - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Refund of unutilized Cenvat credit for input services availed by an exporter of service.
2. Failure of the adjudicating authority to follow the principle laid down in a previous Tribunal order.
3. Recalculation of refund admissible to the appellant based on carried forward refundable amount and accrued refund of the respective quarter.
4. Ensuring the appellant is not deprived of the relief admissible in the respective quarter.
5. Granting reasonable opportunity of hearing to the appellant.
6. Rectification of a clerical error in the memo of appeal.

Analysis:

1. The issue revolves around the refund of unutilized Cenvat credit for input services used by an exporter of service, as mandated by Circular No. 20/01/2010-ST. The Circular allows exporters to carry forward unclaimed credits to subsequent quarters. The Tribunal had previously addressed this issue in Final Order No. 41372/2015, emphasizing the principles established. The authority is directed to calculate the refund considering both carried forward amounts and accrued refunds, ensuring the appellant receives the relief due as per the Circular and Tribunal decisions.

2. It is highlighted that the learned Commissioner (Appeals) and the adjudicating authority failed to adhere to the principles set out in the Tribunal's previous order, leading to the need for a re-calculation of the refund. The absence of an appeal by the Revenue against the Tribunal's decision in a similar case further strengthens the appellant's position regarding the refund entitlement.

3. The directive to grant a reasonable opportunity of hearing to the appellant is crucial for ensuring procedural fairness and compliance with natural justice principles. The importance of timely resolution, especially considering the impact of exports on foreign exchange, is underscored in the judgment.

4. The judgment emphasizes the one-to-one relation and indefeasible right in Cenvat credit jurisprudence, citing a relevant case law to support the appellant's entitlement to the refund. This legal principle reinforces the appellant's claim for the full relief admissible under the law.

5. Additionally, a clerical error in the memo of appeal is acknowledged, and the order directs its rectification. The procedural aspect of correcting errors in legal documents is addressed to ensure accuracy and completeness in the appellate process.

In conclusion, the judgment addresses multiple facets related to the refund of unutilized Cenvat credit for exporters of services, emphasizing compliance with Circular provisions, adherence to Tribunal decisions, procedural fairness, legal principles governing Cenvat credit, and rectification of clerical errors in legal documents.