2023 (5) TMI 511 - AT - Central Excise

Refund of the accumulated CENVAT Credit - denial of benefit on the ground that the invoices were addressed in the old address of the appellant - denial also on the ground of lack of nexus between the input services and the output service exported by the appellant - HELD THAT - The issue regarding mention of wrong address in the disputed invoices has not been agitated by the Department at the time of availment of CENVAT Credit by the appellant. It is no doubt, and admitted fact that the Department had the occasion or scope to invoke the provisions of Rule 14 ibid read with Section 73 ibid at the material time, when the CENVAT Credit was availed by the appellant. In this case, since the Department has failed to invoke such provisions at the relevant point of time, the benefit of refund provided under Rule 5 ibid, cannot be curtailed on the issues, like invoices mentioned some other address and there is no nexus with the exportation of output service. In other words, Rule 5 ibid in unambiguous terms provides that grant of refund is subject to fulfillment of the conditions laid therein and as per the procedures laid prescribed in the notification issued thereunder and not otherwise. The authorities below have not discussed the issue regarding entitlement of the appellant to the benefit of refund inasmuch as, there is no specific discussion as to whether or not, the procedures laid down under Rule 5 ibid as well as the notification have not been complied with by the appellant. Thus, in absence of such specific findings being recorded, in our considered view, rejection of refund benefit cannot be sustained - in the case of CREDIT SUISSE BUSINESS ANALYTICS (INDIA) PVT LTD VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX NAVI MUMBAI 2022 (1) TMI 970 - CESTAT MUMBAI , this Tribunal went to the extent of allowing the CENVAT Credit, even if the invoices were not submitted before the Bench for ascertaining the eligibility of the CENVAT Credit. In the case of Qualcomm India Pvt. Ltd. 2019 (8) TMI 1645 - CESTAT HYDERABAD and M/S BNP PARIBAS INDIA SOLUTION PVT LTD VERSUS COMMISSIONER OF CGST, MUMBAI EAST 2021 (12) TMI 676 - CESTAT MUMBAI , the co-ordinate Bench of the Tribunal has consistently held that nexus aspect cannot be questioned, while considering the grant of refund provided under Rule 5 ibid. Hence, the denial of refund benefit by the Department will not stand judicial scrutiny as per the authoritative decisions rendered by the judicial forum. There are no merits in the impugned order, in so far it has denied the CENVAT benefit to the appellant - appeal allowed.

Summary

Issues:
Refund of accumulated CENVAT Credit for exported services; Denial of refund benefit based on address discrepancy in invoices; Nexus between input services and exported output services.

Analysis:
The case involved the appellants providing taxable services under "Management Consultancy Services" and availing CENVAT Credit on input services. The appellants exported output services to their group company in Singapore, leading to the accumulation of CENVAT Credit that could not be utilized due to the nature of exported services not attracting Service Tax. The appellants sought a refund of the accumulated CENVAT Credit, which was partially granted and denied by the authorities based on reasons including discrepancies in invoice addresses and lack of nexus between input and output services.

The appellant argued that despite some invoices bearing the old address due to office relocation, the services were used for exported output services, justifying the refund under Rule 5. The advocate cited precedents where the Tribunal allowed refunds even without invoice submission, emphasizing the primary requirement of service exportation for refund eligibility. Regarding the nexus issue, the appellant highlighted the absence of allegations on irregular CENVAT Credit availment by the Department, supporting the refund claim's validity.

On the contrary, the Revenue representative supported the lower authority's decision, asserting that the appellant did not comply with statutory provisions for refund eligibility under Rule 5. The proper officer's satisfaction regarding statutory compliance was deemed necessary for refund approval, justifying the denial based on non-compliance.

Upon review, the Tribunal noted Rule 3's provision enabling CENVAT Credit availment and the appellant's inability to utilize it due to service exportation not attracting Service Tax. The Tribunal emphasized that the Department did not raise concerns about the invoice address discrepancy during CENVAT Credit availment, failing to invoke relevant provisions at that time. Consequently, the benefit of refund under Rule 5 could not be curtailed based on issues like address discrepancies or nexus absence, as the rule mandates compliance with laid conditions and procedures, not additional requirements.

The Tribunal found the lower authorities lacked specific discussions on the appellant's entitlement to refund benefits regarding Rule 5 compliance. Citing precedents where the Tribunal allowed CENVAT Credit even without invoice submission and upheld the nexus aspect for refund grants, the Tribunal concluded that the denial of refund benefits by the Department did not hold under judicial scrutiny. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant, emphasizing the importance of adherence to Rule 5 conditions for refund eligibility.