2017 (10) TMI 1123 - AT - Service Tax

CENVAT credit - rebate - whether the appellant an exporter of services is entitled to Cenvat credit for the services received at their unregistered premises which was subsequently included in their Centralized Registration-Certificate and further whether they are entitled to rebate on the services exported? Held that - In the case of Atrenta India Pvt. Ltd. 2017 (4) TMI 563 - ALLAHABAD HIGH COURT held that the provisions of Cenvat Credit Rules do not stipulate registration as a condition precedent for eligibility to claim Cenvat credit and refund/rebate thereof. The Hon ble High Court also observed that where refund is otherwise admissible interpretation to deny refund of the rebate to party by Department cannot be legally sustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Entitlement to Cenvat credit for services received at unregistered premises subsequently included in Centralized Registration-Certificate.
2. Entitlement to rebate on exported services.

Analysis:
1. The appeal involved the question of whether the appellant, an exporter of services, could claim Cenvat credit for services received at unregistered premises later included in their Centralized Registration-Certificate. The appellant had taken Cenvat credit for services received at a business premises in Bangalore, which was not initially included in their centralized registration certificate. The issue arose due to the transfer of business from another entity. The show cause notice alleged contravention of Rule 10(3) of the Cenvat Credit Rules, 2004, as the credit was utilized for paying service tax on exported services. The appellate tribunal considered the arguments and evidence presented by both parties.

2. The Commissioner (Appeals) had initially rejected the rebate claim of the appellant on the grounds that the premises from where the export invoices were issued were not included in the Centralized Service Tax Registration at the relevant time. The Commissioner found that the Service Tax paid by the appellant using the Cenvat credit was incorrect as the premises were not registered at that time. The appellant argued that registration was not a mandatory requirement, citing a ruling from a Single Member Bench of the Tribunal. The appellant also referred to a High Court judgment that held registration was not a condition precedent for claiming Cenvat credit and rebate. The tribunal found that the issue was settled by the High Court rulings and allowed the appeal, setting aside the denial of Cenvat credit and rebate. The tribunal also noted factual errors in the impugned order and directed the Adjudicating Authority to grant the rebate to the appellant within a specified timeframe.