2017 (7) TMI 1028 - AT - Central Excise

100% EOU - Refund claim - input services - Interior Decorator service - Courier Service - Banking and Financial Service - Air Travel Agent Service - Rent-a-cab service - denial on the ground of nexus - Held that - the appellant being a 100% EOU and on the undisputed fact that during the relevant quarter i.e. January 2007 to March 2007 entire manufactured goods have been exported, there is no need of any co-relation to be established. The co-relation is required only when the part manufactured goods is exported and part is cleared in the domestic market - all the services were held as admissible input service and cenvat credit is admissible - appeal allowed - decided in favor of appellant.

Summary

Issues:
Claim for Cenvat Credit refund under Rule 5 of the Cenvat Credit Rules, 2004 denied by adjudicating authority and Commissioner (Appeals).

Analysis:
The appellant, a 100% EOU, filed a refund claim for Cenvat Credit on various input and input services, which was denied by authorities citing inadmissibility of certain services. The appellant contended that the denial exceeded the scope of the show cause notice and argued that since all clearances were for export, there was no need to establish usage of inputs for exports. The appellant provided turnover and credit details for the relevant quarter, claiming the entire credit availed should be refunded as per the formula in Notification No.5/2006-CE. The appellant also cited various decisions supporting the admissibility of the services in question.

The Revenue reiterated that the services were not admissible, and there was a lack of nexus between the services and the exported goods. They argued that without establishing the admissibility and correlation, the refund cannot be granted under Rule 5.

The Member (Judicial) analyzed the submissions and noted that in cases of 100% export, no correlation between inputs and exports needs to be proved, as established in previous Tribunal decisions. The formula provided in the notification for calculating the refund amount was deemed sufficient, and the appellant's claim was found to be correct. The Member emphasized that the issue of admissibility of input services was not raised in the show cause notice, making it improper for the authorities to consider it. Additionally, the Member referenced judgments supporting the admissibility of the input services in question.

Consequently, the Member found the appellant's claim for refund under Rule 5 of the Cenvat Credit Rules, 2004 to be valid. The impugned order was deemed unsustainable, and the appeal was allowed, setting aside the previous order.