Cenvat Credit Refund for Exported Services Cannot Be Denied Over Address and Period-Based Restrictions

Refund of accumulated Cenvat credit for export of services cannot be denied merely because some invoices show an address later accepted as part of the assessee's registered premises, where the credit is otherwise admissible. The refund mechanism under Rule 5 is based on eligible accumulated credit and the export turnover formula, not on limiting refund to credit availed in the same return period. The amendment and departmental clarification support a liberal construction of the refund scheme, so the assessee may claim the balance refund subject to verification, with consequential interest.

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Issues: (i) whether refund of accumulated Cenvat credit under Rule 5 could be denied because certain invoices bore an address later recognised as the appellant's registered additional premises, and (ii) whether refund could be restricted to the amount of credit availed during the relevant period as reflected in the service tax return.

Issue (i): Whether refund of accumulated Cenvat credit under Rule 5 could be denied because certain invoices bore an address later recognised as the appellant's registered additional premises.

Analysis: The refund claim was founded on export of services and accumulation of unutilised credit. The address used in the disputed invoices corresponded to the group company premises at Ranjangaon, which was subsequently accepted by the department as part of the appellant's registered premises. In this setting, the invoices could not be treated as invalid merely because they did not bear only the original registered office address. The amended refund notification and the Board's clarification supported a liberal approach to refund where Cenvat credit was otherwise admissible.

Conclusion: The denial of refund on the ground of wrong address was unsustainable and the assessee was entitled to refund of the credit relatable to those invoices.

Issue (ii): Whether refund could be restricted to the amount of credit availed during the relevant period as reflected in the service tax return.

Analysis: The refund scheme under Rule 5, as amended, was held to operate on the basis of accumulated eligible credit and the export turnover ratio, not by confining the refund to credit taken in the same period. The circular dated 26.02.2010 clarified that refund should not be linked only to Cenvat credit availed in a particular quarter or month, and the business was treated as a continuing entity for this purpose.

Conclusion: The restriction of refund to the period-wise credit shown in the return was rejected and the assessee was entitled to the additional refund also.

Final Conclusion: The appeal succeeded and the rejection of refund was set aside, with direction for grant of the balance refund after verification and consequential interest.

Ratio Decidendi: In refund claims relating to export of services, accumulated eligible Cenvat credit cannot be denied solely because invoices bear an address later accepted as part of the assessee's registered premises, and refund under Rule 5 cannot be confined to credit availed in the same period when the scheme, as amended, permits refund of otherwise eligible accumulated credit.

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