2018 (5) TMI 923 - AT - Service Tax

Refund claim - rejection on the grounds that the operations were carried out at different locations and which were not registered in the Centralised registration and also on the ground that invoices issued by the Service Provider were not in the name of appellant - Held that - the judgment of Hon ble High Court of Karnataka in the case of mPortal India Wireless Solutions Private Limited vs. CST 2011 (9) TMI 450 - KARNATAKA HIGH COURT , is applicable to the facts of the case where it was held that Registration not compulsory for refund - refund cannot be rejected on this ground. Refund claim - rejection on the ground that the invoices were in the name of Pioneer overseas Corporation - Held that - the business activity of Pioneer Overseas Corporation has been transferred to appellant by business transfer agreement w.e.f. 01.01.2015 and the reasoning given by the appellant that few vendors could not update their records with new address is an acceptable reason, on the face of the fact that there is no dispute as to the receipt of input services and the export of services from the premises in the name of appellant herein - refund cannot be rejected on this ground. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of refund claim due to operations carried out at unregistered locations.
2. Denial of refund due to invoices not in the name of the appellant.

Analysis:
1. The appeal challenged the rejection of a refund claim of ?14,94,636 and ?6,35,422. The appellant, an exporter of services, availed CENVAT credit for services at different locations in Hyderabad under a centralised registration. The revenue denied the refund, citing unregistered premises as ineligible for credit. The first appellate authority upheld the denial, stating that the export of services from unregistered locations was not covered by a specific judgment. However, the appellant argued that the services were exported to their account from existing premises where input services were received, a fact undisputed in the case. The appellate authority erred by not following the legal precedent set by the High Court of Karnataka in a similar case, which allowed CENVAT credit for export units regardless of taxable status. The judgment emphasized the lack of statutory provisions mandating registration for credit eligibility, setting aside the denial of refund based on non-existent legal grounds.

2. The appellate tribunal also addressed the denial of a refund of ?6,35,422 due to invoices being in the name of another entity, Pioneer Overseas Corporation. It was established that the business activities of Pioneer Overseas Corporation had been transferred to the appellant through a business transfer agreement. The appellant's explanation that some vendors failed to update records with the new address was deemed acceptable, especially considering the undisputed receipt of input services and export of services under the appellant's name. Consequently, the tribunal set aside the impugned order and allowed the appeal with consequential relief, emphasizing the legal precedence supporting the appellant's claims.

This judgment highlights the importance of legal precedents and statutory provisions in determining refund eligibility for CENVAT credit, emphasizing the need for factual evidence to substantiate refund claims and the transfer of business activities to support invoice discrepancies.