2021 (12) TMI 382 - AT - Central Excise

Refund of CENVAT Credit - Banking and Financial Services - Insurance Services - export of finished goods i.e. Gold Jewellery - time limitation as per N/N. 41/2007-ST - denial on the ground that documents in respect of insurance service are not in the name and address of the appellant but in the name and address of Mumbai Office - evidence produced to substantiate that credit or not - documents are lacking vital details - Rule 4A of Service Tax Rules, 1993 read with Rule 4(7), Rule 9(2) of Cenvat Credit Rules, 2004 - HELD THAT - The refund is governed by Notification 41/07-ST, it is found that the appellant is correct in submitting that at the relevant time this Notification was not in existence, therefore, it is wrong on the part of the Learned Commissioner (Appeals) to import and apply the non-existent notification. The appellants have claimed the refund in respect of the input service used in relation to export of finished goods, therefore, the refund is correctly governed by Rule 5 read with Notification No. 27 of 2012-CE(NT), therefore, rejection of refund referring to Notification 41/2007-ST is absolutely incorrect being not relevant. The learned Commissioner (Appeals) also given finding for rejection of the claim that the cenvat document is not in the name of the appellant but in the name of their Mumbai Office. Mumbai Office is not an independent entity and not carrying out a business separately. The Mumbai office is working solely for the manufacturing unit of the appellant company, one of the factories is the appellant Ahmedabad Factory. It is the submission of the appellant that they have taken credit only to the extent it is related to Ahmedabad Factory, therefore, even if the document is bearing the name and address of the Mumbai office, only on this ground, refund cannot be rejected since service is attributed to the appellant s factory. Therefore, on this ground also, the learned Commissioner (Appeals) has erred in denying the refund. Whether documents on which the cevnat credit was taken are proper in terms of Rule 4A of Cenvat Credit Rules, 2004 read with Rule 9(2) of Cenvat Credit Rules, 2004? - HELD THAT - The appellants have produced the invoices on which cenvat credit was taken and, on going through the invoices, it is found that all the details as required in terms of Rule 4A read with Rule 9 of Cenvat Credit Rules, 2004 are appearing in the invoices. Financial Services - HELD THAT - The amount shown is consolidated amount inclusive of service tax, therefore, the appellant has bifurcated the said amount into the gross value and in the service tax amount, there are nothing incorrect in doing such bifurcation - the documents are correctly bearing all the information required, therefore, the cenvat documents are in confirmation to Rule 4A and read with Rule 9 of Cevnat Credit Rules, 2004. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
- Entitlement for refund claim under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 27 of 2012-CE (NT) dated 18.06.2012 in respect of Cenvat Credit availed on Banking and Financial Services and Insurance Services used for export of finished goods i.e. Gold Jewellery.

Analysis:

1. Notification Applicability and Refund Rejection:
The issue revolved around the rejection of the refund claim by the Learned Commissioner (Appeals) based on various grounds. The rejection was primarily due to the contention that the refund was governed by Notification No. 41/2007-ST, which was not fulfilled concerning the time limit prescribed therein. However, the appellant argued that the correct claim was made under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 27/2012-CE (NT) dated 18.06.2012. The Tribunal agreed with the appellant, emphasizing that the rejection based on Notification 41/2007-ST was incorrect as it was not applicable at the relevant time.

2. Documentary Evidence and Nexus of Input Services:
The rejection was also based on the lack of evidence to substantiate that the credit taken on service tax paid on Commission of Bank Guarantee and Insurance Service pertained to the manufacture and export of finished goods. The appellant argued that the services were indeed used in relation to the export of finished goods and that the nexus between input and output services should not be a ground for rejection. The Tribunal found the appellant's arguments valid, emphasizing that the denial of credit should have been addressed through a separate show cause notice if inadmissible, as established in precedent judgments.

3. Invoice Details and Cenvat Credit Eligibility:
Another issue raised was the discrepancy in the documents regarding the name and address of the appellant, which were in the name of the Mumbai Office. The appellant contended that the Mumbai Office was not an independent entity and that the credit was related to the Ahmedabad Factory, justifying the credit claim. The Tribunal agreed, citing relevant judgments to support the appellant's position. Additionally, the Tribunal found that the invoices met the requirements of Rule 4A of Cenvat Credit Rules, 2004, ensuring the eligibility of the Cenvat credit claimed.

4. Procedural Compliance and Refund Entitlement:
The appellant further argued that the impugned services were used in the manufacture of finished goods exported, irrespective of whether they pertained to the Ahmedabad Unit or Dholera Unit. The Tribunal concurred with the appellant, concluding that the rejection of the refund claim by the Learned Commissioner (Appeals) was incorrect and illegal on both factual and legal grounds. Consequently, the Tribunal allowed the appeals, providing consequential relief to the appellants.

In conclusion, the Tribunal set aside the impugned orders, emphasizing the correct application of the relevant rules and notifications in determining the eligibility for the refund claim on Cenvat Credit availed on Banking and Financial Services and Insurance Services used for the export of finished goods.