2017 (1) TMI 1320 - AT - Service Tax

Refund claim - export of services - rejection on the ground that registration certificate was issued on 21.6.2010 to the appellant, whereas all the input services were availed prior to registration - time limitation as per Section 11B of Central Excise Act - Held that - While, it is a fact that number of appellate forums have taken a view that cenvat credit in respect of services and inputs/capital goods availed even before registration is very much eligible to the assesseee a contrary view has been taken by the Hon ble High Court of Madras, which is jurisdictional High Court for this Tribunal, in the case of CCE Coimbatore Vs Sutham Nylocots 2014 (11) TMI 496 - MADRAS HIGH COURT , where it was held that Even though the assessee claimed exemption on the ground that they had subsequently registered with the Department, as regards the liability as found in the order of adjudication as well as in the order of the Tribunal, we do not find any justifiable ground to accept the plea of the assessee based on the exemption Notification alone that the registration being not a mandatory one, the assessee would be entitled to the benefit of Modvat credit. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim for export of services made during a specific period; Rejection of claim by original authority based on registration date and limitation under Section 11B of Central Excise Act; Appeal by department against Commissioner (Appeals) order allowing the claim; Interpretation of eligibility for cenvat credit before registration; Conflict between Karnataka High Court and Madras High Court decisions on the issue.

Analysis:
The judgment concerns a dispute over a refund claim related to the export of services during a specific period. The original authority rejected the claim citing the registration certificate issue date and the limitation under Section 11B of the Central Excise Act. Subsequently, the Commissioner (Appeals) allowed the appeal of the respondent-assessee, leading the department to file an appeal against this decision.

During the hearing, the department's representative highlighted the reliance placed by the lower appellate authority on a Karnataka High Court decision, arguing its inappropriateness in light of a judgment by the jurisdictional Madras High Court in a different case. The respondent's representative reiterated their submissions and relied on a Tribunal decision and the Karnataka High Court judgment mentioned earlier.

The Tribunal noted the conflicting views on the eligibility of cenvat credit for services and inputs availed before registration. While various appellate forums supported the eligibility, the Madras High Court took a contrary view in a specific case. The Tribunal referenced the Madras High Court judgment, emphasizing the conditions stipulated statutorily for claiming cenvat credit and the significance of registration with the Department for credit accrual. Ultimately, the Tribunal, bound by the Madras High Court judgment, allowed the department's appeal based on the legal precedent established.

In conclusion, the judgment delves into the intricacies of cenvat credit eligibility concerning services and inputs availed before registration, highlighting the conflicting judicial interpretations on the matter. The decision underscores the importance of statutory compliance and registration timelines in determining credit entitlement, ultimately upholding the Madras High Court's stance on the issue.