Cenvat credit refund for exported services remains available despite no taxable domestic output service during the relevant period.

Refund of accumulated Cenvat credit under Rule 5 was treated as admissible for exported services where input services were used for providing export output services. The Tribunal rejected the Revenue's objection that absence of a taxable domestic output service during the relevant period barred refund, holding that the scheme is not defeated merely because the exported services were outside domestic tax net in that period. The claim was therefore held admissible, with consequential relief following in accordance with law.

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Issues: Whether refund of Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004 was admissible to the respondent in respect of exported services, and whether the absence of taxable domestic output service during the material period barred such refund.

Analysis: The dispute turned on the eligibility of the respondent, a service exporter and 100% EOU, to claim refund of accumulated Cenvat credit on input services used for rendering exported output services. The Revenue's objection proceeded on the footing that the respondent was not providing a taxable service during the relevant period and therefore could not be treated as an output service provider for the purposes of the Cenvat Credit scheme. The Tribunal rejected this approach and held that the refund mechanism under Rule 5 is available where credit is taken by a manufacturer or provider of taxable service and is not defeated merely because the exported services are not subject to domestic tax in the material period.

Conclusion: The refund claim was held admissible and the Revenue's challenge failed, leaving the respondent entitled to consequential relief in accordance with law.

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