2017 (6) TMI 37 - AT - Central Excise

100% EOU - refund claim of CENVAT credit - appellant are exporting their final products and as they were not making any regular DTA clearances, they had unutilised Cenvat credit avialed on input services - Held that - Since the appellant has only one factory and the entire credit relates to the services rendered to the said factory of the appellant and there is no dispute on the receipt of services by the factory of the appellant and the use of the services in or in relation to the manufacture of the export goods by the appellant - CENVAT credit cannot be denied to the appellant on procedural grounds - the appellants are entitled to refund except refund of ₹ 2048/- for which the appellant could not produce sufficient documents - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claims under Rule 5 of CCR - Rejection of refund claims by Commissioner (Appeals) - Eligibility of Cenvat credit availed on input services - Invoices addressed to Head Office instead of factory - Disallowance of refund amounts - Denial of CENVAT credit on procedural grounds - Judicial precedents cited in support of appellant's case.

Analysis:
The appellant, a 100% EOU engaged in manufacturing and exporting Silk Fabrics, filed refund claims for unutilized Cenvat credit on service tax paid on inputs and input services. The Commissioner (Appeals) rejected the refund claims, upholding the order-in-original disallowing refund amounts of &8377; 1,30,679/- and &8377; 63,313/- for various reasons, including invoices addressed to the Head Office instead of the factory and non-compliance with service tax registration requirements.

The appellant contended that the rejection of the refund was not legally sustainable, citing binding judicial precedents. In one appeal, the refund disallowed included amounts for invoices addressed to the Head Office and lacking service tax registration details. In another appeal, refund disallowed related to similar issues with invoices. The appellant argued that since they have only one factory, credit availed based on invoices addressed to the registered office should not be denied on technical grounds. They emphasized that the substantive benefits of CENVAT credit should not be denied due to procedural issues.

The appellant relied on judicial decisions like Secure Meters Vs CCE Jaipur and Imagination Technologies India Pvt Ltd Vs CCE Pune to support their case. They argued that as long as the services were rendered to their factory and used in manufacturing export goods, the credit should not be denied. The appellant also provided evidence for some invoices with service tax registration details and produced invoices worth &8377; 2,000 out of the disallowed refund amount of &8377; 4,048.

After considering the submissions and cited judgments, the Judicial Member set aside the impugned order, allowing the refund claims except for the amount of &8377; 2048/- where sufficient documents were not produced. The decision emphasized that the substantive benefits of CENVAT credit should not be denied on procedural grounds, especially when services were rendered to the factory and used for manufacturing export goods.