2022 (2) TMI 855 - HC - Central Excise

Refund of unutilized CENVAT credit of service tax - input service claimed to have been used by them during the period in question viz., August 2008 to September 2008, October 2008 to December 2008 and January 2009 to march 2009 - claim rejected on the ground that respondent was not registered - HELD THAT - Admittedly, in the instant case there is no dispute that the respondent fulfilled the condition as set out in Rule 5 of CENVAT Credit Rules, 2004. However, the benefit of refund has been denied to the respondent on the ground that its not registered. Para 3 of the Notification No.5/06 dated 14.03.2006 does not contain any requirement with regard to registration with the department as a condition precedent for claiming CENVAT Credit Rules, 2004. Even assuming that it is so, such an eligibility condition in the absence of any sanction by the Rules cannot be prescribed by way of notification. The question of law involved in this appeal is squarely covered in MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX 2011 (9) TMI 450 - KARNATAKA HIGH COURT where it was held that Registration not compulsory for refund - Export of software not a taxable service still refund cannot be denied. N o substantial questions of law arise for our consideration in this appeal - Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Eligibility for claiming refund under Notification No.5/06 without service tax registration.
2. Interpretation of Rule 5 of CENVAT Credit Rules, 2004 regarding conditions for refund.

Issue 1: Eligibility for claiming refund under Notification No.5/06 without service tax registration:
The case involved a dispute where the respondent, engaged in providing Information Technology Certificate Services and exporting the same, filed refund claims for unutilized CENVAT credit of service tax. The claims were rejected on the grounds of the respondent not being registered with the service tax during the relevant period and the claims being time-barred. The Commissioner (Appeals) partly allowed the appeal stating that registration was not a precondition for claiming benefits under Notification No.5/06. The tribunal dismissed the appeal, leading to the current appeal before the High Court.

Issue 2: Interpretation of Rule 5 of CENVAT Credit Rules, 2004 regarding conditions for refund:
The High Court analyzed Rule 5 of CENVAT Credit Rules, 2004, which governs the refund of CENVAT credit. The rule allows for the utilization of CENVAT credit towards payment of excise duty or service tax in certain export scenarios. The court noted that the respondent fulfilled the conditions of Rule 5 but was denied the refund due to lack of registration. However, the court held that the requirement of registration was not specified in the relevant notification, and such an eligibility condition cannot be imposed through a notification without legal sanction. The court referred to previous judgments where it was established that registration was not a prerequisite for claiming benefits under the CENVAT Credit Rules, 2004.

In conclusion, the High Court dismissed the appeal, stating that no substantial questions of law arose for consideration based on the established legal principles and precedents. The court found no merit in the appeal and upheld the decision to dismiss it.