2018 (6) TMI 437 - AT - Service Tax

100% EOU - Refund of CENVAT credit - unregistered premises - whether credit is admissible even though the premises of the output service provider is not registered? - Held that - The issue is settled by the decision of the jurisdictional High Court in the case of Commissioner of Central Excise Vs. CESTAT, Chennai 2017 (4) TMI 943 - MADRAS HIGH COURT , where it was held that Rule 5 of the 2004 Rules does not stipulate registration of premises as a necessary prerequisite for claiming a refund - refund allowed. Direction to appellant to file declaration that service provider has remitted the service tax to the Central Government - Held that - We cannot find any sustenance for this direction either from the CENVAT Credit Rules or the Notification. In view thereof, we set aside this direction of the Commissioner (Appeals). Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility of credit on various input services for 100% EOU.
2. Admissibility of credit when the premises of the output service provider is not registered.
3. Requirement of filing a declaration that the service provider remitted service tax to the Central Government.

Eligibility of Credit on Various Input Services:
The appellants, a 100% EOU providing output services to foreign clients, availed CENVAT credit on input services and filed a refund claim. The original authority partially sanctioned the refund and rejected the balance. The Commissioner (Appeals) remanded the issue of credit eligibility on various input services. The appellant did not challenge this remand direction. The Tribunal held that the disallowance of credit and rejection of refund on this ground was unjustified. Following a decision of the jurisdictional High Court, the Tribunal ruled in favor of the appellant, allowing credit/refund.

Admissibility of Credit Without Registered Premises:
The Commissioner (Appeals) upheld the original authority's decision to reject the refund claim based on the premise that credit might not be admissible if the premises of the output service provider were not registered. The appellant contested this, citing a decision of the jurisdictional High Court. The Tribunal agreed with the appellant, stating that the rejection on this ground was unjustified. The appellant was deemed eligible for credit/refund, and the rejection was set aside.

Requirement of Declaration on Service Tax Remittance:
The Commissioner (Appeals and the original authority directed the appellant to file a declaration confirming that the service provider had remitted the service tax to the Central Government. The Tribunal found no legal basis for this requirement in the CENVAT Credit Rules or the Notification. As a result, the Tribunal set aside this direction, instructing the refund sanctioning authority to process the claim without necessitating the declaration. The appeals were allowed with consequential relief, if any, granted to the appellant.