2016 (11) TMI 235 - AT - Central Excise

Refund claim - 100% EOU - utilisation of CENVAT credit on input and input services - export of industrial sewing machine needles falling under Chapter subheading 8452 30 of the First Schedule of CETA 1985 - Held that - I am of the considered opinion that the impugned order is not sustainable in law as all the services involved in the present appeals have been held to be input services by various decisions of the Tribunal and the High Court as held in the cases. Further, I also note that with regard to all the services the Commissioner (A) in the appellant s own case for the earlier period has allowed the refund under Rule 5 of CCR, 2004 and the department has not filed appeal against the same. In view of this situation, the impugned orders are liable to be set aside and I set aside the impugned orders by allowing all the three appeals with consequential relief, if any.

Summary

Issues:
Refund claim for unutilized CENVAT credit on input services; Appeal against Orders-in-Original sanctioning refund; Determination of whether services are input services in manufacturing.

Analysis:
The appellant, engaged in manufacturing and export of industrial sewing machine needles, filed refund claims for unutilized CENVAT credit on input services. The refund sanctioning authority allowed the refund after verifying the conditions specified by the appellant. The department appealed against the Orders-in-Original, alleging lack of findings on service usage in manufacturing the final product and absence of documentary evidence for service utilization. The appellant contended that once CENVAT credit is availed without objection, the refund stage is not for determining service usage. The appellant cited precedents to support service utilization as input services.

The learned counsel argued that the impugned order was against Section 35A, as the Commissioner (A) lacked the power to remand and erroneously remanded the case. The counsel emphasized that the adjudicating authority's detailed findings and the jurisdictional range officer's report supported the refund. The counsel highlighted that the Commissioner should have upheld the order, considering past approvals and relevant case laws. The counsel presented case laws supporting the utilization of various services as input services in manufacturing processes.

Upon reviewing submissions and cited judgments, the Tribunal found the impugned order unsustainable in law. The Tribunal noted that previous decisions had recognized the services as input services, and the department had not appealed against similar refund allowances in the past. Consequently, the Tribunal set aside the impugned orders, allowing all three appeals with any consequential relief.

In conclusion, the Tribunal held that the services in question were deemed input services based on previous legal interpretations and precedents. The Tribunal's decision to set aside the impugned orders and allow the appeals was influenced by the consistent recognition of the services as input services and the lack of departmental appeals against similar refund approvals in the past.