2024 (1) TMI 1118 - AT - Service Tax

Refund claim of unutilized cenvat credit - manufacture of diamonds which were exempted from central excise duty - export of goods without bond or letter of undertaking - neither any show cause notice was issued nor an adjudication process was carried out - violation of principles of natural justice - HELD THAT - In the present case the adjudicating authority though given some observation but held that the refund claim is not admissible. However, the refund claim was returned back to the appellant, this approach of the Assistant Commissioner is clear in violation of principle of natural justice in as much as neither any show cause notice was issued nor an adjudication process was carried out. From the impugned order passed by the learned Commissioner (Appeals), it is found that learned commissioner appeal has observed that the appellant have taken Cenvat Credit without having registration. In this regard, it is found that availment of Cenvat Credit and / or for refund under Rule 5 of Cenvat Credit Rules registration is not mandatory as per Well Known Polyesters Ltd. Vs. Commissioner of C. Ex., Vapi 2011 (1) TMI 664 - CESTAT, AHMEDABAD - In view of the above judgment it is settled that Cenvat Credit and /or refund thereof cannot be denied merely because the claimant has not taken the registration of Service Tax/ Central Excise. The other issue dealt with by the Commissioner (Appeals) is that the refund of input duty /input service tax when appellant s goods which was exported is exempted from Central Excise Duty and Service Tax and the export of the goods was made without bond /LUT - this issue is also settled in various Judgments like The Commissioner of Central Excise Drish Shoes Limited 2010 (5) TMI 334 - HIMACHAL PRADESH HIGH COURT and Well Known Polyesters Ltd. Vs. Commissioner of C. Ex., Vapi 2011 (1) TMI 664 - CESTAT, AHMEDABAD . In view of the above Judgments given by this Tribunal as well as various High Courts, it is settled legal position that even though manufactured goods/ output services is exempted, refund of Service Tax against export of the same cannot be denied. Therefore, in the present case denial of refund claim on the ground that the goods exported is exempted is not sustainable. From the above discussion which is supported by various Judgments - denial of refund, on the ground that the appellant did not possess the registration and the goods exported is exempted, is not sustained. Having held as above since, the Adjudicating Authority has not verified refund documents related thereto, the matter needs to be remanded for reprocessing refund only for limited purpose of verification of documents - appeal allowed by way of remand.

Summary

Issues Involved:
1. Eligibility for Cenvat Credit without registration.
2. Refund of input duty/input service tax when goods exported are exempt from Central Excise Duty and Service Tax and exported without bond/LUT.

Summary:

1. Eligibility for Cenvat Credit without registration:
The appellant challenged the rejection of their refund claim for unutilized Cenvat credit of service tax/central excise duty for the period 2009-2010 to 2011-2012. The appellant had taken registration as a service provider on 20.02.2013 and filed the refund claim on 30.08.2013. The Assistant Commissioner rejected the refund claim, which was upheld by the Commissioner (Appeals). The Tribunal found that the appellant was eligible for Cenvat credit even without registration, citing the case of J.R. Herbal Care India Limited v. CCE, Noida - 2010 (253) E.L.T. 321 (Tri.- Del.). The Tribunal noted that there is no provision in the rules that credit was not available to unregistered manufacturers, and this view was supported by various judicial forums.

2. Refund of input duty/input service tax when goods exported are exempt from Central Excise Duty and Service Tax and exported without bond/LUT:
The appellant argued that refund of unutilized Cenvat credit is admissible even if the goods exported are exempt from duty and exported without bond/LUT. The Tribunal referred to several judgments, including Repro India Ltd vs. UOI - 2009 (235) ELT 614 (Bom.) and CCE vs. Drish Shoes Ltd. - 2010 (254) E.L.T. 417 (H.P.), which held that refund of input credit is admissible when exempted goods are exported without execution of bond. The Tribunal concluded that procedural requirements should not come in the way of legitimate claims for refund and that the denial of refund on the ground that the goods exported were exempted is not sustainable.

The Tribunal remanded the matter to the Adjudicating Authority for reprocessing the refund claim, emphasizing the need for verification of documents related to the refund. The appeal was allowed by way of remand for further processing within two months from the date of the order.

(Pronounced in the open court on 23.01.2024)