2018 (2) TMI 925 - AT - Service Tax

Refund of unutilized CENVAT credit - various input services used for export of Information Technology Software Services - Held that - at the time of availment of cenvat credit it was not disputed by the Revenue that these services are not input services . In the circumstances, at the time of claiming the refund claim, cenvat credit cannot be denied - refund allowed - decided in favor of appellant.

Summary

Issues:
Refund claim denial under Rule 5 of Cenvat Credit Rules, 2004 for unutilized amount in cenvat credit account due to export of services. Discrepancies in correlation between export proceeds and invoices. Nexus of services received with export of services for refund claim entitlement.

Analysis:

1. The appellant, an exporter of Information Software Technology services, filed a refund claim under Rule 5 of Cenvat Credit Rules, 2004 for an amount of ?15,38,858 for services exported during Jan 2010 to March 2010. The claim was rejected due to discrepancies in correlating export proceeds with invoices, as well as a shortfall in export receipts compared to the value of taxable services exported during the claim period.

2. Both lower authorities rejected the refund claim citing lack of nexus between services received and export of services. The appellant argued that a previous Tribunal decision allowed refund claims for various services, except for Transportation of Goods by Air. Relying on this precedent, the appellant sought approval for their refund claim.

3. The Tribunal noted a previous decision where refund claims for various services were allowed, establishing a precedent for similar cases. It was observed that the Revenue did not dispute the nature of the services as 'input services' during cenvat credit availment. Consequently, the Tribunal allowed the refund claim for unutilized cenvat credit, except for Transportation of Goods by Air, based on the established precedent.

4. The judgment emphasized that when services were considered 'input services' during cenvat credit availment, denying the refund claim at a later stage would be unjustified. Therefore, the Tribunal upheld the refund claim for most services, except for Transportation of Goods by Air, based on the principles established in previous decisions. The appeals were disposed of accordingly, with the order dictated in Open Court on 26/10/2017.