2018 (1) TMI 1176 - HC - Service Tax

100% EOU - Refund of unutilized CENVAT credit - denial on the ground that registration not done - N/N. 05/2006-CE(NT) dated 14.03.2006 - Held that - reliance placed in the case of M/s.mPortal India Wireless Solutions Private Limited V. Commissioner of Service Tax, Bangalore 2011 (9) TMI 450 - KARNATAKA HIGH COURT , where it was held that Registration not compulsory for refund - appeal dismissed - decided against Revenue.

Summary

Issues Involved:
1. Eligibility of refund of CENVAT credit without registration of premises.
2. Compliance with conditions and limitations stipulated in Notification No.27/2012-CE(NT), dated 18.06.2016.

Detailed Analysis:

1. Eligibility of Refund of CENVAT Credit Without Registration of Premises:
The respondent, an EOU providing Business Auxiliary Service and Business Support Service, filed refund claims for service tax paid on input services during two periods: January 2013 to March 2013 and April 2013 to June 2013. The adjudicating authority partially sanctioned the refunds but rejected portions due to non-registration of premises and ineligible CENVAT credit on car parking charges. The respondent appealed, and the Commissioner (Appeals) allowed refunds for services received at unregistered premises, stating that registration is not mandatory to claim a refund. This decision was upheld by CESTAT, which referenced the High Court's judgment in M/s Scioinspire Consulting Services, distinguishing it from Sutham Nylocots, and agreeing with the Karnataka and Allahabad High Courts that refunds can be granted even if premises were not registered.

2. Compliance with Conditions and Limitations in Notification No.27/2012-CE(NT):
The appellant argued that registration is a prerequisite for availing CENVAT credit and claiming refunds, as stipulated in Notification No.27/2012-CE(NT). The appellant cited the Larger Bench of CESTAT, New Delhi in Steel Strips vs CCE, Ludhiana, which emphasized that refunds of unutilized credit are permissible only in the case of export. The appellant contended that the CESTAT erred by not considering the safeguards and conditions in the notification, which require that refunds be allowed only for registered premises from where output services are exported.

Judgment Analysis:
The High Court, referencing its decision in Commissioner of Services Tax-III, Chennai Vs. M/s. Scioinspire Consulting Services India Private Limited, and other relevant case laws, upheld that non-registration of premises cannot be a ground to reject refund claims. The court noted that the CESTAT's decision aligned with judgments from the Karnataka and Allahabad High Courts, supporting the view that registration is not mandatory for claiming refunds of CENVAT credit. Consequently, the appeal by the revenue was dismissed, affirming that refunds could be granted even if the premises were not registered at the time of export but were subsequently registered.

Conclusion:
The High Court dismissed the appeal, affirming that refunds of CENVAT credit can be granted for services received at unregistered premises if they were subsequently registered, and that the conditions in Notification No.27/2012-CE(NT) do not preclude such refunds. The substantial questions of law were answered against the revenue, maintaining the CESTAT's decision.