2013 (9) TMI 31 - AT - Service Tax

Refund Claim on Input Service - The appellants were engaged in providing Commercial Training & Coaching, Business Auxiliary Services and Transport of Goods by Road - They filed a refund claim of service tax paid on inputs services under Rule 5 of Cenvat Credit Rules, 2004 - Held that - In terms of the Board circular and also the decision of the Tribunal in the case of CCE, Mysore v. Chamundi Textiles (Silk Mills) Ltd. 2011 (3) TMI 193 - CESTAT, BANGALORE - the appellant was eligible for the refund of the entire amount of service tax credit paid by them on the input service irrespective of when the credit was taken - From the Board s Circular dated 19-1-2010, it was abundantly clear that refund of Cenvat credit can be allowed irrespective of when the credit was taken in case of service providers exporting 100% of their services - it was evident that the appellant was continuously undertaking exports during the said period and there were no domestic clearances. Accumulated input service credit, not pertaining to goods exported during the quarter for which claims were made can be refunded as there was no bar in Notification No. 5/2006-C.E. (N.T.) in granting refund of credit accumulated in the past period in subsequent quarter - Decided in favor of assesse.

Summary

Issues:
Refund claim of service tax paid on inputs services under Rule 5 of Cenvat Credit Rules, 2004 - Rejection of claim based on Notification No. 5/2006-C.E. (N.T.) dated 14-3-2006 - Exclusion of certain amount from Cenvat credit computation - Applicability of Circular No. 120/01/2010 dated 19-1-2010 - Interpretation of Board's Circular regarding refund of Cenvat credit for service providers exporting 100% of their services.

Analysis:
The case involved a refund claim of service tax paid on input services by M/s. Amdocs Business Services Pvt. Ltd., Pune, under Rule 5 of Cenvat Credit Rules, 2004. The claim was based on the ground that due to continuous export of taxable output services, they were unable to utilize the Cenvat credit. The claim was partially allowed, but a portion was rejected citing Notification No. 5/2006-C.E. (N.T.) dated 14-3-2006, which limits refund based on the ratio of export turnover to total turnover. The rejection was also due to exclusion of an amount from Cenvat credit computation, as the services for which credit was taken did not pertain to the services exported during the relevant period.

The appellant relied on Circular No. 120/01/2010 dated 19-1-2010, which clarified that there is no bar on allowing refund of credit accumulated in past periods in subsequent quarters for exporters. They also cited a Tribunal judgment in a similar case supporting the refund of accumulated input service credit. The appellant argued for the appeal based on these grounds.

The Tribunal considered the submissions and referred to the Board's Circular dated 19-1-2010, which allows refund of Cenvat credit for service providers exporting 100% of their services irrespective of when the credit was taken. In light of this circular and the precedent set by the Tribunal in a similar case, the Tribunal held that the appellant was eligible for the refund of the entire amount of service tax credit paid on input services, regardless of when the credit was utilized. Consequently, the appeal was allowed with consequential relief granted to the appellant.