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2018 (2) TMI 1072 - AT - Customs100% EOU - Refund of unutilized CENVAT credit - respondent had claimed that these services on which credit was availed were utilized in the manufacture and export of readymade garments - Held that - the CBEC has issued Circular No.120/01/2010/ST dated 19.1.2010 in which certain guidelines have been prescribed to process such refund claims under Rule 5 - the learned Commissioner (A) has recorded the finding that all the services, received and utilized by the respondent, are having nexus with the service/goods exported. Refund allowed - appeal dismissed - decided against Revenue.
Issues:
- Refund of unutilized CENVAT credit under Rule 5 of CENVAT Credit Rules, 2004 for various input services used in the manufacture and export of readymade garments. Detailed Analysis: The appeals were filed by the Revenue against the Order-in-Appeal No.86/2010, seeking refund of unutilized CENVAT credit under Rule 5 of CENVAT Credit Rules, 2004 for services like freight forwarders, port service, recruitment service, test and certification service, bank processing charges, maintenance service, consultancy service, security service, and courier services used in the manufacture and export of readymade garments by a 100% EOU. The Commissioner (A) allowed the refund of all the services, stating that they had a nexus with the goods exported. The Revenue contended that many of the services were related to business expenses and not exclusively used in the manufacture and export of readymade garments. The dispute revolved around whether the services on which credit was availed were indeed utilized in the manufacture and export of readymade garments. The CBEC had issued Circular No.120/01/2010/ST, providing guidelines for processing such refund claims under Rule 5, stating that tax paid should be clearly evidenced, and the refund should be allowed if the input services have a nexus with the goods exported. The Commissioner (A) found that all the services utilized by the respondent had a nexus with the goods exported, including services like freight forwarder service, port service, test and certification, among others. After considering the nature of services and the findings of the Commissioner (A), the Tribunal upheld the impugned order, stating that it merits no interference. The Tribunal found no merit in the appeals filed by the Revenue and dismissed them accordingly. The order was dictated in Open Court on 12/12/2017.
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