2015 (7) TMI 965 - AT - Service Tax

Denial of refund claim - accumulated Cenvat Credit - Commissioner (Appeals), rejected their appeal holding that the amount of refund cannot exceed the amount of Cenvat credit as per S.T. 3 return and as the invoice for some services mentioned the Ranjangaon address being, not registered address - whether professional bills were addressed, is the address of the group company which was subsequently recognized as registered office of the appellant by Revenue - Held that - Refund of Cenvat Credit cannot be restricted to the amount of credit availed during the period, as per the service tax return because, it is a case of continuous business activity under business entity concept . The appellant is entitled to avail refund under the spirit of Rule 5 of CCR read with notification No. 5/2006 (as amended) read with clarification Circular dt. 26.2.2010 (supra). Thus the appellant is also entitled to refund of ₹ 78,795/-, rejected on account of non-inclusion in service tax return for the period. Thus, the appeal is allowed and the impugned order is set aside so far as it relates to rejection of refund. - Decided in favour of assessee.

Summary

Issues:
1. Refund claim of Cenvat Credit for export of services.
2. Eligibility of Cenvat Credit for services availed from specific providers.
3. Rejection of refund claim based on the address mentioned on invoices.
4. Interpretation of Circular No. DOF No. 334/1/2010-TRU regarding refund provisions.
5. Entitlement to refund beyond the amount of credit availed during the period.

Analysis:
1. The appellant, a service provider under 'Design services,' exported 100% of its services, leading to an accumulation of unutilized Cenvat Credit. A refund claim of Rs. 4,52,084/- for April 2010 to June 2010 was filed. The Deputy Commissioner allowed a refund of Rs. 2,77,213/- after disallowing a portion due to services from providers with an address discrepancy.

2. The Commissioner (Appeals) rejected the appeal holding that the refund cannot exceed the Cenvat credit as per the return and cited the incorrect address on invoices as a reason for rejection. The appellant appealed to the Tribunal, arguing for refund eligibility based on Circular No. DOF No. 334/1/2010-TRU and the recognition of the Ranjangaon address by the Revenue.

3. The Tribunal noted that the Ranjangaon address was of a group company later recognized as the appellant's registered office. The appellant was held entitled to a refund of Rs. 78,795/- rejected for non-inclusion in the service tax return. The Tribunal allowed the appeal, setting aside the rejection of the refund and directing the adjudicating authority to issue the balance refund with interest within 45 days.

4. The Tribunal interpreted the Circular to support the appellant's refund claim beyond the amount of credit availed during the period, emphasizing continuous business activity under the 'business entity concept.' The appellant was deemed entitled to the refund under Rule 5 of CCR read with notification No. 5/2006 and the clarification Circular, allowing for a refund of Rs. 78,795/- initially rejected.

5. In conclusion, the Tribunal allowed the appeal, overturning the rejection of the refund claim and instructing the adjudicating authority to process the balance refund with interest. The judgment highlighted the appellant's entitlement to refund based on the Circular's provisions and the recognition of the Ranjangaon address, ensuring fair settlement of refund claims.