2018 (1) TMI 54 - AT - Service Tax

Exporter's Refund Appeal Granted by CESTAT Tribunal citing Cenvat Credit Rules

Fibcom India Ltd. Versus Commissioner of Cus., C. Ex. & S.T., Noida

The Appellate Tribunal CESTAT ALLAHABAD allowed the exporter's appeal regarding the rejection of refund claims, citing Rule 5 of Cenvat Credit Rules, ... Validity of subsequent SCN - Interest on refund - Held that: - The issue of subsequent show cause notice was wholly without jurisdiction and also amounts to insubordination - SCN not sustainable - appellant is entitled to interest in addition to the amount of refund - appeal disposed off. Issues:Refund claim rejection, jurisdictional change, subsequent show cause notice, interest on refund.Refund Claim Rejection Analysis:The appellant, an exporter, filed refund claims for unutilized Cenvat credit due to export. The initial claims were rejected through Orders-in-Original and upheld by the Commissioner (Appeals). However, the Tribunal allowed the appeals, citing Rule 5 of Cenvat Credit Rules, 2002 as a beneficial legislation, emphasizing the substantive right to refund. The Tribunal set aside the rejection and granted the appeal with consequential relief to the appellant.Jurisdictional Change Analysis:Due to the appellant shifting their factory, jurisdiction changed, and refund matters were transferred to the Commissionerate at Noida. A subsequent show cause notice was issued questioning the refund claim, which was considered without jurisdiction. The Tribunal found the notice unsustainable, setting aside the subsequent Order-in-Original and Order-in-Appeal in line with the earlier Tribunal order. The appellant was granted interest on the refund, clarified to be applicable after three months from the date of filing the refund applications.Subsequent Show Cause Notice Analysis:The show cause notice issued by the Commissionerate at Noida post-jurisdictional change was deemed insubordinate and wholly unsustainable by the Tribunal. The Tribunal set aside the subsequent orders based on the notice, reiterating the decision from the earlier Tribunal order. The appellant was entitled to interest on the refund, to be calculated after three months from the date of filing the refund applications, with directions for the adjudicating authority to grant interest within three months from the date of the Tribunal's order receipt.This judgment from the Appellate Tribunal CESTAT ALLAHABAD addressed the rejection of refund claims, jurisdictional changes impacting refund matters, the issuance of a subsequent show cause notice, and the entitlement to interest on the refund. The Tribunal emphasized the beneficial nature of Rule 5 of Cenvat Credit Rules, 2002, ensuring the substantive right to refund for exporters. The Tribunal found the subsequent show cause notice to be without jurisdiction and insubordinate, setting aside the related orders and clarifying the appellant's entitlement to interest on the refund.