2019 (12) TMI 712 - AT - Central Excise

Refund of CENVAT Credit - inputs and services in question for export - rejection on the ground that as per the said notification the appellant is required to reverse Cenvat credit availed on the services in question before filing the refund claim - Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 27/2012-ST dt. 18.06.2012 - HELD THAT - The issue decided in the case of M/S. FRESENIUS KABI ONCOLOGY LTD. VERSUS COMMISSIONER, CGST, GURUGRAM 2019 (11) TMI 1264 - CESTAT CHANDIGARH where on similar issue refund was allowed. It is also not disputed that the appellant has not reversed Cenvat credit. The appellant is entitled to claim the refund as filed by them - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 27/2012-ST due to failure to reverse Cenvat credit before filing the claim.

Analysis:
The appellant, an exporter, filed a refund claim under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 27/2012-ST for unutilized Cenvat credit. The claim was rejected as the appellant did not reverse the Cenvat credit before filing the claim, a condition under the said notification. The appellant argued that they reversed the credit before the show cause notice was issued, citing a Tribunal decision in a similar case. The Authorized Representative contended that strict compliance with the notification was necessary, justifying the rejection.

In the Tribunal's analysis, a previous case involving a similar issue was referenced. In that case, the appellant had also not reversed the Cenvat credit before filing the refund claim. However, it was noted that there was no provision in the system to debit the value of refund, and the credit was voluntarily reversed later. The Tribunal found this to be compliant with the notification's condition, especially post-GST implementation. Referring to a Board circular and consistent views in other orders, the Tribunal held that denial of refund was not lawful and set aside the rejection, allowing the appeal.

Based on the precedent set in the referenced case, the Tribunal ruled in favor of the appellant, stating that the denial of the refund claim was unjustified. As the issue had been resolved in favor of the appellant previously and considering the lack of disputed facts regarding the failure to reverse Cenvat credit, the Tribunal allowed the appeal and set aside the impugned order, granting the appellant the right to claim the refund as filed.

In conclusion, the Tribunal's decision favored the appellant, emphasizing compliance with the notification's conditions post-GST implementation and setting aside the rejection of the refund claim due to the failure to reverse Cenvat credit before filing the claim.