2023 (3) TMI 576 - AT - Service Tax

Refund of unutilized CENVAT Credit - part of the refund claims were rejected stating that the CENVAT Credit in respect of such rejected amounts are not admissible to the appellants - Time Limitation - Rule 14 of the CENVAT Credit Rules - HELD THAT - There was no initiation of proceedings to recover alleged inadmissible CENVAT Credit by invocation of provisions of Rule 14 of CENVAT Credit Rules, 2004 in the present case. The appellants were entitled for the refund of CENVAT Credit which was rejected to them. Appeal allowed.

Summary

Issues:
Refund of unutilized CENVAT Credit under Notification No. 27/2012-CE (NT) | Rejection of part of the refund claims | Invocation of Rule 14 of the CENVAT Credit Rules for denial of availment of CENVAT Credit | Applicability of precedent decision in M/s M & G Global Services Pvt. Ltd. case | Entitlement of appellants for refund of rejected CENVAT Credit

Analysis:
The case involved the appellants, a Portfolio Manager with Service Tax registration under Banking and Financial Services, filing applications for refund of unutilized CENVAT Credit under Notification No. 27/2012-CE (NT). Part of their refund claims was rejected, leading to an appeal before the Commissioner (Appeals). The resultant denial of refund of CENVAT Credit amounted to Rs.39,75,048, prompting the appellants to approach the Tribunal.

During the proceedings, the Learned Counsel for the appellant argued that there was no initiation of proceedings invoking Rule 14 of the CENVAT Credit Rules for denial of availment of CENVAT Credit within the normal period of limitation. The Counsel referenced a previous decision of the Tribunal in the case of M/s M & G Global Services Pvt. Ltd., emphasizing that the issue was already settled in favor of the appellants.

The Tribunal, after reviewing the submissions and records, cited the precedent decision in the M/s M & G Global Services Pvt. Ltd. case. It reiterated that as long as the CENVAT Credit has not been recovered through proceedings initiated by Rule 14 of the CENVAT Credit Rules 2004, the credit remains available for utilization by the assessee. In this case, since there was no initiation of proceedings to recover the alleged inadmissible CENVAT Credit, the Tribunal held that the appellants were entitled to the refund of the rejected CENVAT Credit.

Consequently, the Tribunal allowed all four appeals, stating that the appellants were entitled to consequential relief in accordance with the law. The judgment emphasized the importance of following precedent decisions and ensuring that denial of refund is based on valid legal grounds, specifically invoking Rule 14 of the CENVAT Credit Rules for denial of availment of CENVAT Credit.