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2021 (3) TMI 1002 - AT - Service Tax100% EOU - Refund of unutilized CENVAT Credit - scope of input services - denial of refund on the ground of lack of nexus with output services of export - Rule 5 of CENVAT Credit Rules 2004 read with Notification No.27/2012-CE (NT) dated 18.6.2012 - HELD THAT - In the impugned order Commissioner (A) has wrongly relied upon the old circular of 2010 whereas the definition of input service has been amended with effect from 1.4.2011 and vide Notification No.27/2012-CE (NT) dated 18.6.2012 one-to-one correlation is not required to be established. Further the appellant has given detailed reasons explaining the nexus between the input service and the output service exported by the appellant. Moreover the department has not questioned the CENVAT credit availed by the appellant at the initial stage and the same cannot be questioned at the time of claiming of refund. Since all the input services involved in the present cases except those four services viz. Business Support Service Management Maintenance and Repair Service Recovery for Gym and supply of tangible goods have been held to be input services by various decisions the appellant is entitled to refund of CENVAT credit on all these input services. Interest on delayed refund - HELD THAT - Apex court in the case of UOI vs. Hambard L(Waqf) Laboratories 2016 (3) TMI 68 - SUPREME COURT have held that the assessee is eligible for interest on refund amount sanctioned in case there is a delay beyond the stipulated period of three months as prescribed under the law - Hence the appellant is entitled for the interest on the delayed sanction of the refund. Appeal allowed in part.
Issues Involved:
Appeal against rejection of refund claims under Rule 5 of CENVAT Credit Rules, 2004 read with Notification No.27/2012 dated 18.6.2012. Detailed Analysis: 1. Refund Claims and Rejection: The appellant filed nine refund claims under Rule 5 of CENVAT Credit Rules, 2004 for unutilized CENVAT credit of service tax on input services exported. The Commissioner (A) partially rejected the refund claims, leading to the appeals. The rejection was based on the nexus between input services and output services. 2. Arguments by Appellant: The appellant contended that the rejection lacked legal basis as the definition of 'input service' had been amended, and nexus was not required as per various decisions and a TRU letter. They argued that the refund eligibility is not the same as credit eligibility. Reference to case laws supported the input services' classification. 3. Legal Precedents and Circulars: The appellant cited Circulars and decisions emphasizing that the department cannot question credit eligibility during refund claims. They highlighted Circular No.120/01/2010-ST and subsequent clarifications, asserting their entitlement to refunds. 4. Defense by Respondent: The Respondent defended the rejection based on Circulars and specific exclusions of certain services. The appellant conceded on specific services, not pressing for their refund. 5. Tribunal's Decision: The Tribunal found the input services essential for the appellant's business, noting their 100% Export Orient Unit status. The rejection based on nexus was deemed incorrect, especially considering the amended definition of 'input service.' The Tribunal accepted the appellant's detailed explanations and held them eligible for refunds. 6. Interest on Delayed Refund: Citing legal precedents, the Tribunal ruled in favor of interest on delayed refunds beyond three months. The judgment referred to the liability of the revenue to pay interest under Section 11BB of the Act and upheld the appellant's entitlement to interest on delayed refunds. 7. Final Decision: The Tribunal allowed the appeals, except for four specific input services, and granted refunds accordingly. The judgment emphasized the importance of nexus, legal definitions, and timely interest payments on refunds. This detailed analysis covers the key aspects of the legal judgment, including the issues raised, arguments presented by both parties, legal precedents cited, and the final decision rendered by the Tribunal.
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