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2018 (10) TMI 1077 - AT - Service Tax100% EOU - Refund of CENVAT Credit - refund was rejected on the ground that availment of CENVAT Credit for the disputed period was not reflected in the ST-3 returns and the returns filed at the end of the quarter showed the available credit balance as zero - N/N. 27/2012-CE (NT) dated 18.06.2012 - Held that - Since the appellant claimed that revised returns were filed manually and the same were available with the department for necessary verification, the matter should be remanded to the original authority for verification of ST-3 returns manually filed by the appellant and the input service invoices, based on which credit was availed by the appellant - appeal allowed by way of remand.
Issues:
Refund of service tax paid on input services for a 100% Export Oriented Unit (EOU) due to inability to utilize CENVAT Credit properly. Analysis: The appellant, a 100% EOU, exported the entire output service to clients outside the country and availed CENVAT Credit on service tax paid on input services used for providing the output service. However, the refund applications were rejected by the jurisdictional Service Tax authorities because the CENVAT Credit was not reflected in the ST-3 returns as per Notification No. 27/2012-CE (NT) dated 18.06.2012. The Revenue contended that the appellant did not follow the prescribed procedures. The appellant's consultant argued that due to an oversight, the credit details were not included in the electronic returns but were later filed manually, supported by records and certification by a Chartered Accountant. The consultant asserted that the refund should be granted based on the export of service and the proper availing of CENVAT Credit. The Revenue, represented by the D.R., maintained that the statutory requirements were not met by the appellant, justifying the denial of the refund benefit. After hearing both sides and examining the records, the Tribunal found that the appellant, as a service provider exporting services, should be entitled to the accumulated CENVAT Credit balance as a refund under Rule 5 of the Cenvat Credit Rules, 2004. The Tribunal noted that the denial of the refund was primarily due to the discrepancy in the ST-3 returns and that the matter should be remanded to the original authority for verification of manually filed returns and invoices supporting the credit availed by the appellant for input services used in the export of service. If the records demonstrate the proper utilization of input services for the export, the refund benefit should be granted under Rule 5. Consequently, the Tribunal set aside the impugned order and remanded the matter to the original authority for a fresh decision in line with the observations made. The appellant was to be given an opportunity to present their case before the fresh decision. As a result, the appeals were allowed by way of remand, ensuring a fair review of the refund claim based on the proper utilization of CENVAT Credit for export-oriented activities.
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