2017 (10) TMI 23 - AT - Service Tax

100% EOU - Refund of unutilized CENVAT credit - denial on the ground that appellant is not able to show records that they had in fact sufficient credit balance in cenvat credit account - whether the appellant is eligible for refund of cenvat credit of service tax paid by them on input services, utilised for rendering export of software? - Held that - Appellant has not filed any evidence to show that they had in fact such balance carried forward in the balance sheet before the Tribunal or before the lower authorities - the appellant is not eligible to claim refund or cenvat credit on the input services of which there are no balances in their books of accounts - appeal dismissed - decided against appellant.

Summary

Issues Involved:
- Eligibility for refund of cenvat credit of service tax paid on input services for rendering export of software.

Analysis:
The appeal was directed against Order-in-Appeal No. 53/2012(H-IV)ST, dated 19.03.2012. Despite multiple notices, no representation was made by the appellant. The issue in question was whether the appellant was entitled to a refund of cenvat credit of service tax paid on input services utilized for software export. The appellant, a 100% EOU registered with STPI, had filed refund claims under Cenvat Credit Rules, 2004. The claims were rejected by the adjudicating authority due to the lack of evidence showing sufficient credit balance in the cenvat credit account. The first appellate authority also upheld this decision, leading to the appeal before the Tribunal.

The appellant attempted to justify the refund claim by stating that software services were provided from India and used outside India, with payments received in convertible foreign exchange. The appellant referred to a guidance note on accounting treatment recommending adjustment of balances not likely to be used within a reasonable time. However, the appellant failed to substantiate these claims with evidence before the Tribunal or lower authorities. The first appellate authority's detailed findings highlighted discrepancies in the appellant's financial records regarding the treatment of service tax paid on input services in their books of accounts. The authority observed that the appellant did not have a balance in the cenvat credit receivable account, contrary to what was reported in the ST-3 returns.

The appellant argued that they were eligible to avail credit under Rule 3 of CCR and denied the allegation of availing double benefits. However, the first appellate authority rejected all refund claims based on the lack of balance in the cenvat credit for utilization as per the conditions set out in Notification No. 5/2006 CE (NT). The Tribunal concurred with the first appellate authority's factual findings, noting that the appellant failed to effectively counter the decision in the grounds of appeal. Consequently, the appeal was rejected as devoid of merits, upholding the impugned order.

In conclusion, the Tribunal upheld the decision to reject the appellant's refund claims due to the lack of evidence supporting the availability of cenvat credit for utilization in their books of accounts. The appellant's failure to substantiate their claims and counter the first appellate authority's findings led to the dismissal of the appeal.