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2022 (10) TMI 1009 - AT - Service TaxRefund of CENVAT Credit - providing Business Support Services to their foreign clients - Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. 27/2012-C.E (N.T.) dated 18.06.2012 - July 2014 to September 2014 - the grievance of the appellant is that the amount of Rs.2,93,427/- was not sanctioned to the appellant in cash and instead, was directed to take re-credit of the said amount - HELD THAT - Whatever the reasons may be for rejection of cash refund, it has to be seen that after the introduction of G.S.T., the said direction to take re-credit has become impractical for the appellant - The Tribunal in the case of VEER-O-METALS PVT LTD VERSUS COMMISSIONER OF CENTRAL TAX, BANGALURU SOUTH COMMISSIONERATE 2021 (4) TMI 117 - CESTAT BANGALORE had considered a situation as to whether refund in cash can be allowed when credit cannot be availed by the assessee. As the appellant has been allowed to take re-credit and is not able to do the same due to the introduction of G.S.T., I am of the view that he has to be given refund of the said amount in cash - the appellant is eligible for refund of the amount of Rs.2,93,427/-. Appeal allowed - decided in favor of appellant.
Issues:
Refund claim under Rule 5 of CENVAT Credit Rules, 2004 read with Notification No. 27/2012-C.E (N.T.); Rejection of cash refund; Applicability of G.S.T. on re-credit; Interpretation of Rule 5(1)(B) of CENVAT Credit Rules, 2004; Entitlement to cash refund post-G.S.T. implementation. Analysis: The case involved a refund claim filed by the appellants for a specific amount under Rule 5 of the CENVAT Credit Rules, 2004, which was partially sanctioned by the Original Authority. The remaining amount was directed to be taken as re-credit by the appellant, leading to an appeal before the Commissioner (Appeals) challenging the rejection of cash refund. The appellant argued that the authorities failed to consider that the credit availed during the relevant period should entitle them to a refund, regardless of re-credit taken. The appellant highlighted the impracticality of re-credit post-G.S.T. implementation, emphasizing their entitlement to cash refund based on legal provisions (Rule 5(1)(B) of CENVAT Credit Rules, 2004) and previous tribunal decisions. The appellant's counsel cited the case of M/s. Veer-o Metals Pvt. Ltd. to support their argument for cash refund post-G.S.T. introduction. The Tribunal considered the appellant's contentions and the practical implications of the G.S.T. regime on re-credit. Referring to the case of M/s. Veer-o Metals Pvt. Ltd., the Tribunal analyzed the legal provisions and previous decisions regarding cash refund eligibility for unutilized CENVAT credit in specific scenarios, especially related to clearances between EOUs. The Tribunal emphasized the provisions of sub-section (3) and sub-section (6)(a) of Section 142 of the CGST Act, which mandate cash refund for eligible claims, irrespective of previous re-credit actions. The Tribunal noted the appellant's genuine belief in receiving cash refund, leading to the debiting of the CENVAT account, and ruled in favor of the appellant's entitlement to cash refund based on legal provisions and precedents. In conclusion, the Tribunal set aside the impugned order, allowing the appeal and granting the appellant the refund amount in cash. The decision was based on the appellant's inability to re-credit due to G.S.T. implementation, legal provisions under the CGST Act, and the precedent set by previous tribunal decisions. The Tribunal provided consequential reliefs to the appellant in accordance with the law, emphasizing the appellant's entitlement to cash refund despite previous re-credit actions and practical challenges post-G.S.T. enforcement.
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