2021 (6) TMI 900 - AT - Service Tax

Refund of unutilized input service credit - rejection of part claim on the ground that input services was taken for the period before October 2016 while arriving at the total CENVAT Credit taken during the quarter October to December 2016 - HELD THAT - A more or less similar issue has been addressed to by the Learned Bench wherein also the appellant had clubbed its refund claims and the Bench had held that The restriction under notification provided to avoid multiple claims in particular quarters therefore the claim should be filed quarterly basis but if the claim is filed after six months for two quarters there is no violation of any condition. Only condition which bar the refund is refund should be filed within the overall period of one year from the relevant date. If that be so refund is well within the time limit and same should be allowed. Further, it has been held by co-ordinate Mumbai CESTAT (M/s. WNS Global Services Pvt. Ltd. vs. C.C.E., Pune III 2015 (11) TMI 905 - CESTAT MUMBAI , followed in M/s. Q Logic India Private Limited vs. C.S.T., Pune 2016 (7) TMI 1175 - CESTAT MUMBAI that for the purposes of refund, the CENVAT credit of any particular quarter will include the amount of brought forward credit as well from the earlier quarter - When this is the position of law, then denying the refund on the ground that the CENVAT Credit on input services was taken for the period before October 2016 while arriving at the total CENVAT Credit taken during the quarter October to December 2016, cannot stand. The rejection of the refund claim is improper - it is held that the appellant s claim for refund is in order and the rejection of the same is improper - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim of unutilized input service credit; Rejection of part of the refund claim based on CENVAT Credit taken before October 2016; Definition of export turnover; Clubbing of CENVAT Credit for different quarters; Judicial precedents on refund claims; Denial of refund based on timing of CENVAT Credit utilization.

Analysis:
The appellant filed a refund claim for unutilized input service credit, which was partially rejected by the Adjudicating Authority based on the CENVAT Credit taken before October 2016. The Adjudicating Authority stated that the CENVAT Credit on input services taken before October 2016 was ineligible. On appeal, the rejection was confirmed by the Commissioner (Appeals-II), leading to the current appeal before the forum.

During the hearing, the appellant argued that due to no inward remittance from July 2016 to September 2016, no FIRCs were available, impacting the definition of export turnover. The appellant had clubbed the CENVAT Credit for the quarter July to September 2016 with the CENVAT Credit for the quarter ending 2016. The appellant cited the Mumbai Bench's decision in a similar case to support their argument.

Referring to the Mumbai CESTAT decisions, it was established that for refund purposes, the CENVAT credit of a quarter includes the brought forward credit from the earlier quarter. Therefore, denying the refund based on the timing of CENVAT Credit utilization was deemed improper. The rejection of the refund claim was held to be incorrect as the Revenue did not contest the merit of the claim. Consequently, the forum set aside the impugned order and allowed the appeal with consequential benefits, if any, as per the law.

In conclusion, the judgment addressed issues related to the rejection of a refund claim based on the timing of CENVAT Credit utilization, the definition of export turnover, and the clubbing of CENVAT Credit for different quarters. The decision relied on judicial precedents to establish that the rejection of the refund claim was improper, leading to the allowance of the appeal with consequential benefits.