9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (1) TMI 661 - AT - Service Tax100% EOU - Refund of unutilised credit u/r 5 of CCR - rejection on the ground of nexus - Held that - Commissioner (Appeals) has allowed the appeal of the assessee on the basis of the decision of CESTAT, Bangalore in the case of ANZ International 2007 (11) TMI 218 - CESTAT, BANGALORE , where it was held that Rule 5 of the CENVAT Credit Rules provides for refund of Cenvat credit where the appellants are not able to utilize the same - appellants had availed Cenvat credit and they were not in a position to utilize the same for the reason that all the products were exported as per Rule 5 CCR, they are rightly entitled for the refund of unutilized credit. The learned Commissioner (Appeals) has also held that all the input services are directly used in relation to the processing of iron ore and they are admissible for credit and all the input services fall in the definition of input service as contained in Rule 2(l) of the Cenvat Credit Rules. Appeal dismissed - refund allowed - decided against Revenue.
Issues:
- Refund of unutilized cenvat credit under Rule 5 of the Cenvat Credit Rules 2004. - Entitlement of cenvat credit on input or input services under Rule 6(1) of Cenvat Credit Rules 2004. - Applicability of Rule 6(6) of the CENVAT Credit Rules to goods cleared for export under bond. - Admissibility of input services directly used in relation to the processing of iron ore. Analysis: 1. The appeal pertains to the refund claim of unutilized cenvat credit under Rule 5 of the Cenvat Credit Rules 2004. The appellant, an EOU holder, sought a refund of &8377;26,22,828 for input services used in manufacturing iron ore products. The Assistant Commissioner initially rejected the claim, citing lack of nexus. However, the Commissioner (Appeals) allowed the appeal based on a precedent from CESTAT, Bangalore, emphasizing that the exported goods were exempt from duty, justifying the refund claim. 2. The learned AR argued against the sustainability of the Commissioner's decision, contending that the final product was unconditionally exempt from duty, making the appellant ineligible for cenvat credit under Rule 6(1) of the Cenvat Credit Rules 2004. The AR highlighted that the exemption was due to a notification under the Central Excise Act, not solely because of exportation. 3. The pivotal issue revolved around the interpretation of Rule 6(6) of the CENVAT Credit Rules, which carves out exceptions for goods cleared for export under bond. The CESTAT's decision in a similar case involving an EOU, supported by the Karnataka High Court, emphasized that 100% EOUs can avail cenvat credit on duty-paid inputs, even when the final products are exempt from duty, as per Rule 5 of the Rules. The judgment underscored the legitimacy of refund claims when goods are exported without domestic clearance. 4. Additionally, the Commissioner (Appeals) affirmed that all input services directly related to iron ore processing were eligible for credit under Rule 2(l) of the Cenvat Credit Rules. The Tribunal upheld the Commissioner's decision, finding no fault in granting the refund claim and dismissing the Revenue's appeal. The judgment reaffirmed the entitlement of EOUs to cenvat credit and refunds for unutilized credits, aligning with the legal framework of the Cenvat Credit Rules. This detailed analysis of the judgment provides a comprehensive overview of the legal issues addressed and the reasoning behind the decision, focusing on the interpretation and application of relevant rules and precedents in the context of cenvat credit refund claims for exported goods.
|
