2018 (7) TMI 1394 - HC - Service Tax

Refund of unutilized CENVAT Credit - Rule 5 of CCR 2004 - rejection of refund on the ground of non-registration of premises - Held that - Reliance was placed in the case of mPortal India Wireless Solutions Private Limited V. Commissioner of Service Tax, Bangalore 2011 (9) TMI 450 - KARNATAKA HIGH COURT , where it was held that Registration not compulsory for refund - refund cannot be denied - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against rejection of refund claim under Cenvat Credit Rules, 2004 based on non-registration of premises. CESTAT's decision to allow refund without registration challenged. Interpretation of safeguards and conditions under Notification No.27/2012-CE(NT), dated 18/6/2012 questioned. Application of precedent judgments and relevance of registration for availing Cenvat credit in export services disputed.

Analysis:
The Civil Miscellaneous Appeal was filed challenging the rejection of a refund claim under Cenvat Credit Rules, 2004 due to non-registration of premises. The appellant, a service provider in the IT sector, sought a refund of ?2,50,07,166 for the period April 2012 to June 2012. The Original Authority rejected a part of the claim on grounds of non-registration. On appeal, the Commissioner (Appeals) allowed the appeal, leading to the department filing an appeal before the CESTAT. The CESTAT, in its Final Order No.42324/2017, dismissed the revenue's appeal, citing precedent judgments like Scioinspire Consulting Services (India) Pvt Ltd and E-Care India Private Ltd.

The substantial questions of law raised included whether CESTAT's decision to allow the refund without registration was correct and if the safeguards and conditions under Notification No.27/2012-CE(NT) were duly considered. The appellant's counsel argued that registration is crucial for availing benefits like Cenvat Credit and that non-registration renders the respondent ineligible for such credit. The counsel emphasized that compliance with conditions and procedures is essential to claim substantive benefits under the law.

Furthermore, the appellant contended that the CESTAT erred in allowing the refund based on the non-taxability of export services, highlighting the necessity of registration for procedural and substantive compliance. Reference was made to a judgment involving Steel Strips vs CCE, Ludhiana, emphasizing that refund of unutilized credit is permissible only in cases of export of goods. The appellant also challenged the application of precedent judgments, arguing against their binding nature due to monetary limits.

In considering the matter, the Court referred to similar cases and relevant notifications, ultimately concluding that the substantial questions of law were answered against the revenue. The decision in a related case, C.M.A.No.860 of 2017, set a precedent against the revenue, leading to the dismissal of the Civil Miscellaneous Appeal. The judgment highlighted the importance of registration for availing Cenvat credit in the context of export services and upheld the decision in favor of the appellant, dismissing the appeal with no costs awarded.