2010 (7) TMI 92 - AT - Service Tax

Cenvat Credit- The Assistant Commissioner rejected the refund claim on the ground that the assessee was not registered with the Department as a provider of service. Also the refund claim was barred by limitation. Commissioner (Appeals) sustained the order of the Original Authority. Held that- A person not registered with the department cannot obtain refund under Rule 5 of CCR. I find that the BSNL case cited by the appellant did not deal with the requirement of registration to qualify for credit. Thus the appeal is rejected.

Summary

Issues:
1. Refund of accumulated cenvat credit for a software development unit engaged in export.
2. Eligibility for cenvat credit under Rule 6(1) of Cenvat Credit Rules, 2004.
3. Time limit for claiming refund of accumulated cenvat credit.
4. Requirement of registration with the department for availing cenvat credit.

Analysis:
1. The appellant, a software development unit engaged in export, claimed refund of accumulated cenvat credit. The Assistant Commissioner rejected the claim, stating the appellant was not eligible for cenvat credit under Rule 6(1) of Cenvat Credit Rules, 2004, as software development was exempt. The Commissioner (Appeals) upheld this decision.

2. The Tribunal heard the appellant's arguments citing Rule 5 of CCR, case laws, and Circulars binding the officers to sanction refund claims by exporters promptly. The Tribunal noted the benefit of cenvat credit should not be denied based on technical grounds like registration. However, the impugned order held that the appellant, being engaged in exempted software development, was not entitled to credit under Rule 6(1) of CCR.

3. The appellant argued there was no time limit for claiming refund of accumulated cenvat credit, citing various judicial authorities. The Tribunal observed that the limitation specified in Section 11B of the Act did not apply to refund of cenvat credit, but the appellant failed to provide documents substantiating the claim.

4. The Tribunal found that being registered with the department was a prerequisite for availing cenvat credit. The appellant's failure to register meant it could not earn credit of service tax paid on input services. The Tribunal noted that the appellant's reliance on a specific case did not address the registration requirement for qualifying for credit. Ultimately, the appeal was rejected due to the appellant's ineligibility for cenvat credit and failure to meet registration requirements.

This detailed analysis highlights the key legal issues, arguments presented, and the Tribunal's decision regarding the refund of accumulated cenvat credit for a software development unit engaged in export.