2018 (2) TMI 481 - AT - Service Tax

Refund claim - scope of SCN - Held that - the respondent were not issued with any SCN invoking Rule 14 of CCR 2004 proposing recovery of said Cenvat Credit. Therefore, the said Cenvat Credit which is available in the Cenvat account and which otherwise satisfied other requirements of said Rule 5 cannot be refused to be refunded - appeal dismissed - decided against Revenue.

Summary

Issues involved:
Appeal against denial of refund under Rule 5 of Cenvat Credit Rules, 2004 based on eligibility of input services under Rule 2.

Analysis:
The appeal before the Appellate Tribunal CESTAT, ALLAHABAD was directed against Order-in-Appeal No. passed by the Commissioner of Central Excise (Appeals-I), Meerut. The respondent had filed a claim for refund of ?14,50,00,000 under Rule 5 of Cenvat Credit Rules, 2004, but a show cause notice was issued questioning the eligibility of availed credit under Rule 2. The Order-in-Original rejected a portion of the refund, leading to an appeal by the appellant. The Commissioner (Appeals) overturned the Original Authority's decision and allowed the refund, prompting the Revenue to appeal to the Tribunal.

The grounds of appeal primarily revolved around the Original Authority's denial of refund based on the ineligibility of services under Rule 2 of Cenvat Credit Rules, 2004. The learned AR argued that the services for which refund was denied were not eligible as input services, while the respondent's counsel contended that since no show cause notice under Rule 14 had been issued to deny the Cenvat Credit, the refund should not be withheld. The respondent relied on a previous Tribunal decision to support their argument.

After considering the arguments, the Tribunal found that no show cause notice invoking Rule 14 had been issued to recover the Cenvat Credit, and as the credit was available in the Cenvat account and met the requirements of Rule 5, it could not be denied for refund. Consequently, the Tribunal rejected the appeal by the Revenue and ruled in favor of the respondent, entitling them to consequential relief as per law.

In conclusion, the Tribunal's judgment emphasized the importance of following procedural requirements and issuing appropriate notices before denying refund claims under the Cenvat Credit Rules. The decision highlighted that without a show cause notice invoking the relevant rule, the availability of credit in the account should not be refused for refund, ensuring fairness and adherence to legal procedures in such matters.