2016 (11) TMI 1287 - AT - Central Excise

Tribunal Allows Refund Claim for Cenvat Credit Dispute

Nitin Spinners Ltd. Versus C.C.E. - Jaipur

Nitin Spinners Ltd. Versus C.C.E. - Jaipur - 2017 (52) S.T.R. 172 (Tri. - Del.) Issues:1. Refund claim under Rule 5 of the Cenvat Credit Rules, 2004 for accumulated credit.2. Dispute over the refund of Cenvat credit related to GTA service and erection, installation, commissioning service for a power plant.3. Appeal against the Commissioner (Appeals) order regarding refund of service tax paid on input services.Analysis:1. The appellant, a manufacturer of cotton yarn and knitted fabrics, availed Cenvat credit for duty payment on DTA clearances. The dispute arose when the refund claim of accumulated credit was partially rejected by the Assistant Commissioner. The Commissioner reviewed the order and rejected a portion of the refund claim based on specific grounds raised by the Department.2. The first ground for rejection was that a portion of the accumulated credit was related to GTA service for outward transportation of export goods, which the appellant was not entitled to claim. The second ground was that the credit for service tax on erection, installation, commissioning service for a power plant was claimed for goods exported before the plant started functioning. The Commissioner (Appeals) upheld the rejection of the GTA service credit but allowed the rejection of the power plant service credit.3. The appellant appealed against the Commissioner (Appeals) order, arguing that a direct correlation between input services and exported goods was not necessary for claiming the refund under Rule 5. They relied on a Tribunal judgment to support their position. The Departmental Representative opposed the appeal, emphasizing the lack of use of input services in manufacturing the exported goods.4. The Tribunal considered the arguments and previous judgments, including the one cited by the appellant. It noted that the one-to-one co-relationship between input services and exported products was not a requirement at the original order stage. As the issue was decided in favor of the assessee by a previous Tribunal decision, the Tribunal set aside the Commissioner (Appeals) order and allowed the appeal for refund of the accumulated credit.In conclusion, the Tribunal ruled in favor of the appellant, allowing the refund claim under Rule 5 of the Cenvat Credit Rules, 2004 based on the established legal principles and precedents.