2018 (2) TMI 890 - AT - Central Excise

Refund claim - denial on the ground that the Repairs and Maintenance Services availed by the appellant have no nexus with the export of goods made by them - Held that - claim cannot be rejected merely on the ground that the refund claim filed by the appellant for the services availed for Repairs and Maintenance service have no nexus with the export of goods - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Appeal against rejection of refund claim under Rule 5 of Cenvat Credit Rules, 2004 due to lack of nexus between Repairs and Maintenance Services and export of goods.

Analysis:

1. The appellant contested the rejection of their refund claim under Rule 5 of Cenvat Credit Rules, 2004 on the basis that the Repairs and Maintenance Services they utilized did not have a direct connection with the export of goods. Upon hearing both parties, it was noted that the appellant did not dispute at the time of availing the cenvat credit that these services did not fall under the definition of 'Input Service' as per Rule 2(l) of the Cenvat Credit Rules, 2004. The main contention revolved around the refund claim for the unutilized cenvat credit. Reference was made to a previous Tribunal case where it was established that certain services required by the appellant for providing output services qualified as input services, and any disallowance of input credit without proper notice was deemed unjustified. Consequently, the Tribunal concluded that the issue at hand had already been settled, and the rejection of the claim solely based on the lack of nexus between the services and export of goods was unfounded.

2. The Tribunal's decision was supported by the fact that the essential requirement for the refund claim was met through the utilization of services necessary for providing output services. The Tribunal emphasized that the rejection of the claim solely on the grounds of the perceived absence of a connection between the Repairs and Maintenance Services and the export of goods was unjustifiable. Therefore, the impugned orders were set aside, and the appeals were allowed with consequential relief. The judgment was delivered in open court on 23/10/2017 by Shri Ashok Jindal, Judicial Member, at the Appellate Tribunal CESTAT, Bangalore.

This detailed analysis of the judgment highlights the key legal aspects and reasoning behind the decision to overturn the rejection of the refund claim under Rule 5 of the Cenvat Credit Rules, 2004.