2018 (1) TMI 533 - AT - Service Tax

100% EOU - Refund of unutilized CENVAT credit - rejection on the ground that refund claims have been filed prior to the registration of the particular services exported - Held that - reliance placed in the case of mPortal India Wireless Solutions P. Ltd. 2011 (9) TMI 450 - KARNATAKA HIGH COURT , wherein it is held that registration of a unit which exports the services is not required for claiming the refund of the cenvat credit lying in balance - appeal dismissed - decided against Revenue.

Summary

Issues:
Refund of unutilized cenvat credit for a 100% EOU.

Analysis:
The judgment pertains to five applications filed by the Revenue seeking a stay on the operation of an order-in-appeal regarding the refund of unutilized cenvat credit by the respondent, a 100% EOU. The refund claims were initially rejected by the adjudicating authority on the grounds that they were filed before the registration of the particular services exported. However, the first appellate authority set aside the order-in-original and allowed the appeals after considering submissions and records.

During the proceedings, the departmental representative argued that the first appellate authority erred in relying on a decision of the Hon'ble Karnataka High Court and cited a case from the Hon'ble Madras High Court to support their argument regarding the eligibility to avail cenvat credit before registration. On the other hand, the Chartered Accountant representing the respondent highlighted subsequent decisions of the Hon'ble Karnataka High Court supporting the refund of cenvat credit without the necessity of unit registration for service exports.

The tribunal, upon reviewing the records, found no merit in the Revenue's request for a stay. It noted that the first appellate authority had thoroughly examined the issue and concluded that the respondent was entitled to the refund based on the Karnataka High Court's decision. The tribunal agreed with the Chartered Accountant's argument that the Karnataka High Court reaffirmed its stance in subsequent judgments. Additionally, the tribunal distinguished the case cited by the departmental representative, emphasizing that it involved a different scenario of availing cenvat credit for goods manufactured domestically, unlike the current situation of a 100% EOU claiming a refund under the Cenvat Credit Rules, 2004.

Ultimately, the tribunal dismissed the stay petitions filed by the Revenue, concluding that there were no merits in their arguments based on the established legal precedents and the specific circumstances of the case.