2018 (2) TMI 1492 - AT - Central Excise

Refund of unutilized CENVAT credit - Rule 5 of the CCR 2004 - It is the case of the Revenue that when the CENVAT credit itself is not available the question of availing the same and claiming refund under Rule 5 does not arise - Held that - the concurrent findings as recorded by both the lower authorities seems to be in consonance with the law as it is the avowed policy of Govt of India that the exports should not be burdened with taxes specifically when there is no dispute as to the services rendered and utilized for the exported consignments non-sanctioning of the refund claims of the service tax paid would add to the value of export consignments. The sanction of the refund claim by the adjudicating authority in this case is itself an acceptance of the fact that these documents are eligible for availment of CENVAT credit. Appeal dismissed - decided against Revenue.

Summary

Issues:
Refund of service tax paid on input services utilized for iron ore.

Analysis:
The appeal concerns the refund of service tax paid on various input services used for iron ore. The Revenue challenges the refund granted by the adjudicating authority and the 1st Appellate Authority, arguing that as iron ore is exempt from duty, the respondent could not have availed CENVAT credit on the services. The Revenue contends that if CENVAT credit is not available, the question of claiming a refund under Rule 5 does not arise. The Revenue further argues that the documents on which CENVAT credit was claimed were incomplete and that debit notes are not eligible documents for CENVAT credit. The Revenue also points out that goods cleared for export could not have been cleared under bond or LUT as per a specific notification.

The respondent, represented by learned counsel, relies on various tribunal decisions to support their claim for the refund. They argue that being a 100% EOU, the accumulated CENVAT credit refund cannot be denied based on the exported final goods attracting a 'NIL' rate of duty. The respondent cites specific cases to bolster their argument and interprets Notification No.24/2010 to exclude the operator of Rule 19 of Central Excise Rules 2002 for 100% EOU.

After considering the submissions, the judge finds that the lower authorities' factual findings are correct. The services in question were utilized in the excavation of iron ore for export, and the respondent provided all necessary documents, as verified by the adjudicating authority. The judge notes that the policy of the Government of India is to not burden exports with taxes, especially when services are undisputedly used for exported consignments. The judge upholds the impugned order and the refund sanction, emphasizing that non-sanctioning of the refund claims would increase the value of export consignments. Additionally, the judge clarifies that the provisions of the Service Tax Rules regarding debit notes do not conflict with the CENVAT Credit Rules, which allow credit on documents meeting specific criteria.

In conclusion, the judge upholds the impugned order, rejecting the Revenue's appeal.