2020 (1) TMI 273 - AT - Service Tax

Refund of CENVAT Credit remaining unutilized - refund rejected on the ground that the appellant failed to show the nexus with the services utilized with that of services exported - HELD THAT - It is a fact on record that, at the time of availing of CENVAT credit, it was shown by the appellant that, at any time no question was raised for inadmissibility of the CENVAT credit. In these circumstances, at the time of filing of refund claim, it cannot be questioned that the appellant is not entitled to CENVAT credit. The appellant is entitled to refund of the CENVAT credit lying unutilized in their CENVAT account - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund of CENVAT credit for exported services

Analysis:
The appellant, an exporter of services, utilized various services and availed CENVAT credit on them. Upon filing refund claims for unutilized CENVAT credit, the claims were rejected due to the alleged lack of nexus between input and output services. The appellant contested this rejection, citing a previous Tribunal order that stated the admissibility of CENVAT credit cannot be challenged during refund claim processing. The adjudicating authority's rejection of the refund claim without issuing a show cause notice for inadmissible services was deemed illegal and arbitrary. The Tribunal found that the services in question were directly used by the appellant for providing output services, making them eligible for CENVAT credit. Consequently, the impugned order rejecting the refund claim was deemed improper and illegal. The Tribunal held that the appellant was entitled to a refund of the unutilized CENVAT credit, setting aside the previous orders and allowing the appeals with consequential relief.