2023 (5) TMI 79 - AT - Central Excise

Refund of Service Tax paid - CHA service - N/N. 41/2007-ST dated 06-10-2007 - HELD THAT - As per clause (d) of the proviso of the notification, it is seen that the manufacturer shall not avail CENVAT Credit if refund claim is filed under the said Notification. It implies that the manufacturer has an option to avail credit instead of filing the refund. The issue has been analysed by the Tribunal in the case of MONARCH CATALYST PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE-I 2016 (2) TMI 64 - CESTAT MUMBAI where it was held that as per Notification 41/2007-S.T., dated 6-10- 2007 as superseded by Notification 18/2009-S.T., dated 7-7-2009, the appellant has an option either to avail Cenvat credit or to claim refund and the appellant has chosen to claim Cenvat credit and this fact has been reflected in the records of the appellant also, but the respondent has never raised any objections all through. Earlier to the present audit, the department has conducted the audit on two occasions but the department never raised this issue. The demand cannot sustain - Appeal allowed.

Summary

Issues Involved:
The issue involved in the appeal is whether the appellant is eligible to avail CENVAT credit for service tax paid on CHA services related to exports, or if they should have applied for a refund instead.

Summary:
The appellant holds Central Excise and Service Tax registrations and had availed input service credit for service tax paid on CHA services related to exports. The department contended that the appellant should have applied for a refund instead of availing CENVAT credit. The original authority held the appellant eligible for CENVAT credit, but the Commissioner (Appeals) overturned this decision. The Tribunal analyzed Notification No. 41/2007-ST, which states that no CENVAT credit should be taken if a refund claim is filed. The Tribunal referred to previous cases and held that the appellant had the option to avail credit or claim a refund. Therefore, the demand for recovery of wrongly availed CENVAT credit was set aside, and the appeals were allowed.

Key Points:
- The appellant availed CENVAT credit for service tax paid on CHA services related to exports, instead of applying for a refund as per Notification No. 41/2007-ST.
- The department issued a show cause notice to recover the wrongly availed CENVAT credit, which was contested by the appellant.
- The Tribunal analyzed the Notification and previous cases to determine that the appellant had the option to avail credit or claim a refund.
- The Tribunal found that the demand for recovery of CENVAT credit was not sustainable and set aside the impugned order, allowing the appeals with consequential relief.

Separate Judgment:
No separate judgment was delivered by the judges in this case.