2018 (9) TMI 132 - AT - Service Tax

Refund of unutilized CENVAT Credit - N/N. 27/2012-NT dated 18th June, 2012 - Export of Services - whether export turn-over of inputs would be equal to the Total Turnover in terms of clause (E) of Rule 5 (1) of Cenvat Credit Rules, 2004 and that when there is no dispute of Service Tax payment on input services, whether the assessee is eligible for refund of Cenvat Credit which remains unutilized? Held that - The total turn-over has to be calculated on such value of export turnover as is to be calculated in the manner provided under sub-rule(d) of Rule 5 of CCR - the meaning of all other services as mentioned in the definition of total turnover under Rule 5 (1) E of CCR, 2004 has not been provided in CCR, 2004. As per the Law of purposive interpretation the Commissioner (Appeals) observed that the text proceeding the phrase all other services is export turnover . Hence, all other services would mean value of all services other than the exported service . Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Refund claim under Notification No.27/2012-NT dated 18th June, 2012.
2. Rejection of refund claim due to differences in mailing address and export turnover.
3. Eligibility for Cenvat Credit on input services received at unregistered premises.
4. Challenge to the decision and re-quantification of the demand.
5. Interpretation of export turnover in relation to total turnover under Rule 5 of Cenvat Credit Rules, 2004.

Analysis:
1. The case involves a refund claim under Notification No.27/2012-NT dated 18th June, 2012, amounting to ?6,63,657, filed by the appellant for Cenvat Credit availed on input services related to the export of services. The original adjudicating authority rejected the claim citing differences in mailing address and export turnover discrepancies.

2. The Commissioner (Appeals) allowed the appellant's eligibility for Cenvat Credit on input services received at unregistered premises but directed a re-quantification of the demand. The issue of export turnover, specifically whether it should be equal to total turnover, was not fully resolved, leading to the present appeal challenging this decision.

3. During the hearing, the appellant argued that no show cause notice was issued, and the adjudication was based on the refund application. The main contention was the calculation of export turnover in relation to total turnover, with reliance on relevant case law to support their position.

4. The Department, represented by the ld. D.R., supported the findings of the Commissioner (Appeals) regarding the calculation of total turnover based on received payments, asserting no errors in the order. The appeal was urged to be dismissed.

5. The Tribunal analyzed Rule 5 of Cenvat Credit Rules, 2004, focusing on the interpretation of export turnover vis-à-vis total turnover. It was observed that the calculation of total turnover should align with the provisions of the rule, considering payments received for export services. The Tribunal found in favor of the appellant, emphasizing discrepancies in the treatment of unpaid invoices and the definition of "all other services" under Rule 5 (1) E of CCR, 2004.

6. Ultimately, the Tribunal concluded that the order under challenge was erroneous in its interpretation of export turnover and total turnover. The decision was set aside, and the appeal was allowed in favor of the appellant, highlighting the need for a comprehensive understanding of the legal provisions and factual circumstances in such cases.