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2023 (3) TMI 571 - AT - Service TaxRefund of service tax paid on input services - export of services - April 2016 to September 2016 and October 2016 to March 2017 - Rule 5 of CENVAT Credit Rules, 2004 - HELD THAT - When the CENVAT Credit is availed by the assessee so long as the same has not been recovered by proceedings initiated by invocation of Rule 14 of CENVAT Credit Rules 2004, such credit remains on the books of accounts of the assessee and he can utilize the same in the manner provided by law. In the present case, the appellants had exported the services and, therefore, were eligible for refund of unutilized CENVAT Credit. The appellants were entitled for refund of Rs.23,73,694 claimed by them for the period from April 2016 to March 2017 - Appeal allowed.
Issues:
- Entitlement to claim refund of service tax paid on input services under Rule 5 of CENVAT Credit Rules, 2004. - Rejection of refund by the original authority and Learned Commissioner (Appeals). - Absence of notice under Rule 14 of CENVAT Credit Rules, 2004 for recovery of CENVAT Credit availed. - Applicability of previous Tribunal's final order and High Court's affirmation on similar issue. Analysis: The case involved the appellants, who are exporters of services seeking a refund of service tax paid on input services consumed in the services exported for the periods April 2016 to September 2016 and October 2016 to March 2017. The original authority rejected part of the refund claimed, leading to the appellants appealing to the Learned Commissioner (Appeals), who in a common Order-in-Appeal dated 25.07.2019, rejected the total amount claimed as refund under Rule 5. This rejection prompted the appellants to approach the Tribunal for redressal. During the proceedings, the Learned Counsel for the appellants argued that the rejection of the refund lacked a notice under Rule 14 of CENVAT Credit Rules, 2004 for the recovery of CENVAT Credit availed by them. He emphasized that as long as the CENVAT Credit remains unutilized and not recovered under Rule 14, the appellants are entitled to claim a refund, citing a previous final order of the Tribunal and a High Court judgment affirming this position. The Learned AR for the Revenue acknowledged the absence of a demand under Rule 14 against the appellants. Upon careful consideration of the submissions and the case records, the Tribunal found that the issue at hand had already been settled through a previous final order of the Tribunal, which was upheld by the Hon'ble High Court of Hyderabad. The Tribunal reiterated that as long as the CENVAT Credit remains unutilized and not recovered under Rule 14, the appellants are entitled to claim a refund. In this case, since the appellants had exported the services, they were eligible for the refund of the unutilized CENVAT Credit. Consequently, the Tribunal set aside the impugned order and allowed both appeals, granting the appellants the refund claimed and any consequential relief as per law. In conclusion, the Tribunal's judgment reaffirmed the appellants' entitlement to the refund of service tax paid on input services consumed in the exported services, emphasizing the importance of compliance with the CENVAT Credit Rules and the absence of recovery proceedings under Rule 14 to reject such claims.
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