2017 (3) TMI 518 - AT - Service Tax

Rebate claim - export of services - denial on the ground that the appellant had also availed refund of CENVAT Credit paid under N/N. 5/2006 dated 14.3.2006, both rebate as well as refund of input service credit cannot be availed in respect of same set of inputs invoices - Held that - the refund of CENVAT Credit is admissible provided the claimant does not claim rebate of duty under Central Excise Rules in respect of such duty or rebate of Service Tax under Export of Service Rules, 2005 in respect of such taxes. It is apparent that the claim of rebate of Service Tax under Export of Service Rules, 2005 and refund of CENVAT Credit u/r 5 of the CCR are mutually exclusive schemes - Appeal dismissed - decided against appellant.

Summary

Issues:
Claim of rebate of Service Tax paid on exported services alongside refund of CENVAT Credit under Rule 5 of Cenvat Credit Rules.

Analysis:
The appellant, engaged in export of IT services, claimed rebate of Service Tax paid on exported services and refund of CENVAT Credit under Rule 5. The lower adjudicating authority disallowed the rebate, stating that both rebate and refund cannot be claimed for the same set of invoices. The Commissioner (Appeals) upheld this decision.

The appellant argued that there is no restriction on claiming both benefits and cited relevant rules. They contended that the refund under Rule 5 and rebate under Export of Service Rules are distinct schemes. The appellant's calculations were presented to support their claim.

The Revenue supported the lower authority's decision, leading to a detailed analysis by the Tribunal. It was noted that the appellant included invoices for which rebate was claimed in the refund calculation under Rule 5, which was technically incorrect. The Tribunal highlighted the exclusivity of the rebate and refund schemes under the respective rules.

Rule 5 of Cenvat Credit Rules was examined, emphasizing that the refund is subject to conditions, including not claiming rebate of Service Tax under Export of Service Rules. The Tribunal pointed out discrepancies in the appellant's calculations, indicating an incorrect refund claim amount.

The Tribunal rejected the appellant's argument that the term "such tax" in the rule refers only to input duty, clarifying that it encompasses Service Tax on output services. Consequently, the Tribunal found no merit in the appellant's arguments and dismissed the appeal.

In conclusion, the Tribunal upheld the decision to disallow the rebate claim alongside the refund of CENVAT Credit under Rule 5. The judgment was pronounced on 28.02.2017.