2019 (5) TMI 1567 - AT - Service Tax

Refund of unutilized Credit - rejection on the ground that the claim pertained to the period before taking registration - HELD THAT - The issue in dispute is no longer res integra and has been laid down to rest by a number of decisions and in particular the judgement of the Hon ble High Court in THE COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI VERSUS BNP PARIBAS SUNDARAM GLOBAL SECURITIES OPERATIONS PVT LTD. 2018 (6) TMI 676 - MADRAS HIGH COURT wherein it has been held that registration of assessee s premises is not a pre-requisite for claiming credit of refund under Rule 5 of CCR, 2004. Refund is to be allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Eligibility of service provider for refund of unutilized cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 before registration.
2. Interpretation of the requirement of registration for claiming credit of refund under Rule 5 of CCR, 2004.

Issue 1 - Eligibility for Refund of Unutilized Cenvat Credit:
The case involved a service provider under Information Technology Software Service category who had taken registration as providers of IT Software service on 16.07.2009. The service provider availed cenvat credit of service tax charged on services received prior to registration, which remained unutilized as the services were exported. The respondents filed a refund claim under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No.5/2006-CE (NT) dt. 14.3.2006. The original authority rejected the refund claim citing it pertained to a period before registration, making the respondents ineligible for the refund. However, the Commissioner (Appeals) allowed the appeal relying on the Tribunal decision in Textech International (P) Ltd. The issue was whether the service provider was eligible for the refund of unutilized cenvat credit under Rule 5 of CCR, 2004 before registration.

Issue 2 - Interpretation of Registration Requirement:
The Tribunal examined whether registration of the assessee's premises was a prerequisite for claiming credit of refund under Rule 5 of CCR, 2004. Citing the judgment of the Hon'ble High Court in BNP Paribas Sundaram Global Securities Operations Pvt. Ltd., the Tribunal concluded that registration of premises was not a mandatory requirement for claiming a refund under Rule 5 of CCR, 2004. The Tribunal referred to various case laws including CST, Chennai Vs. CESTAT, Chennai, mPortal India Wireless Solutions Pvt. Ltd., and CST, Chennai Vs. Verizon Data Services India Pvt. Ltd. to support its decision. The Tribunal highlighted that recent decisions by the Hon'ble High Court of Madras reiterated that Rule 5 of CCR, 2004 did not mandate registration of premises as a necessary prerequisite for claiming a refund. Consequently, the Tribunal dismissed the appeal of the department, emphasizing that the registration of premises was not a condition for claiming the refund of unutilized cenvat credit under Rule 5 of CCR, 2004.

In conclusion, the judgment clarified the eligibility of service providers for the refund of unutilized cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 before registration and interpreted the registration requirement for claiming credit of refund under Rule 5 of CCR, 2004. The decision emphasized that registration of premises was not a mandatory condition for claiming a refund, as established by various legal precedents and judgments, ultimately dismissing the department's appeal.