2018 (11) TMI 1461 - AT - Service Tax

100% EOU - refund of accumulated CENVAT Credit - rejection on the ground that the credit particulars in respect of the input services were reflected in the ST-3 Returns for the period March 2012, which is after the date of export - Held that - In the Cenvat regime, there is no specific requirement regarding maintenance of statutory records in the prescribed registers, which were hitherto provided under erstwhile Central Excise Rules, 1944 and the MODVAT statute. Since the appellant contended that the disputed credit was availed during the period April to June 2011 for export of service effected during such quarter, the benefit of refund in terms of Rule 5 cannot be denied on mere non-reflection of the credit particulars in the ST-3 Returns for such relevant period. The appellant had not produced any records to show that the credit particulars were really reflected in the Books of Accounts and were relatable to the services exported by the appellant during the period April to June 2011 - the matter should be remanded to the original authority for verification of the accounting records maintained by the appellant, to satisfy himself that the credit was availed during the relevant period and services were utilized for providing the exported output service during such period. Appeal allowed by way of remand.

Summary

Issues: Refund of accumulated CENVAT Credit for input services utilized in providing exported output services by a 100% Export Oriented Unit (EOU) under the STPI Scheme.

Analysis:
1. The appellant, a 100% EOU registered under the STPI Scheme, exported Information Technology Services and claimed a refund of accumulated CENVAT Credit for input services used in providing the exported output services. The refund for the period April 2011 to June 2011 was denied by the authorities as the credit particulars were reflected in the ST-3 Returns for March 2012, post the date of export.

2. The appellant's advocate argued that the credit particulars reflected in the March 2012 returns were actually related to the period before June 2011. He contended that the appellant had maintained sufficient records to establish that the credit particulars were connected to the export of services during April to June 2011. He emphasized that procedural lapses should not undermine the substantive right for the refund claim.

3. The Revenue representative supported the authorities' decision, stating that the appellant failed to provide evidence that the disputed input services were used for the services exported during April to June 2011, justifying the rejection of the refund claim.

4. Upon hearing both sides and reviewing the records, it was noted that the Commissioner (Appeals) upheld the decision based on the non-reflection of input credit in the relevant ST-3 Returns for April to June 2011. However, the appellant argued that the credit particulars were inadvertently not reflected in the returns but were recorded in their accounting books. The absence of a specific requirement for maintaining statutory records under the Cenvat regime was highlighted.

5. The Tribunal found that the appellant's contention that the credit was availed during April to June 2011 for exporting services during that quarter warranted a verification of the accounting records to confirm the credit utilization. The matter was remanded to the original authority for this purpose, emphasizing that the appellant need not prove the nexus between input and output services as a 100% EOU dealing solely with exports.

6. The impugned order was set aside, and the case was remanded for a fresh adjudication order based on the observations made. The appellant was granted a personal hearing before a new decision was reached.

7. Consequently, the appeal was allowed by way of remand, ensuring a fair opportunity for the appellant to present their case during the fresh adjudication process.