2020 (1) TMI 73 - AT - Service Tax

Refund of accumulated Cenvat credit - export of various services - intermediary services - POPOS Rules - location of the intermediary service provider was in India - rule 9 of the Place of Provision Rule 2012 - HELD THAT - No objection was raised by the Revenue at the time of availing the credit such objection cannot be raised at the time of deciding the refund claim in terms of provisions of Rule 5. The issue has also been considered by the Tribunal in the case of Accelya Kale Solutions Ltd. Vs. Commissioner of Central Goods Service Tax and Central Excise Mumbai 2018 (8) TMI 19 - CESTAT MUMBAI where it was held that Rule 5 of Cenvat Credit Rules 2004 was substituted vide Notification No. 18/2012-CE (NT) dated 17.03.2012 with effect from 01.04.2012. The said substituted rule has prescribed the formula for claiming refund of service tax by the service provider. Under such amended rule in vogue there is no requirement of satisfying the nexus between the input services and the output service provided by the service provider. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of refund claim of accumulated Cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 due to location of intermediary service provider being in India.

Analysis:
The appellant, engaged in exporting services, filed refund claims under Rule 6A of the Service Tax Rules, 1994. The adjudicating authority sanctioned the claims after verifying fulfillment of conditions like location of service provider, recipient outside India, and consideration received in foreign exchange. The Revenue appealed the decision, arguing that the services provided were intermediary services, not eligible for export benefits under Rule 9 of the Place of Provision Rule, 2012.

The Tribunal, led by Hon'ble Mrs. Archana Wadhwa, noted that objections regarding Cenvat credit availability should have been raised at the time of availing credit, not during refund claims assessment under Rule 5. Citing Circular no. 120/01/2010-ST and precedents like the Barclay Global case, the Tribunal emphasized that the Revenue cannot raise objections during refund claims if not raised during credit availment. The Tribunal also referenced the Accelya Kale case, highlighting the amended Rule 5's simplified refund scheme without requiring a nexus between input and output services.

In light of the above, the Tribunal set aside the Commissioner (Appeals) decision and reinstated the original authority's order, allowing the appeal in favor of the appellant. The judgment emphasizes the importance of raising objections at the appropriate stage and aligning with the amended refund rules under Rule 5 of the Cenvat Credit Rules, 2004.