2018 (4) TMI 1174 - AT - Service Tax

Appeals allowed for refund claims of unutilised Cenvat credit, not bound by time limits. Reevaluation ordered.

The Tribunal allowed the appeals, holding that the refund claims for accumulated unutilised Cenvat credit of duty for post removal services were valid ... Refund of unutilized CENVAT credit - Port Services - Courier Services - GTA Services - denial of credit on the ground that the services are post removal services - Rule 5 of CCR 2004 - Held that: - the refunds were admittedly filed u/r 5 of CCR 2004. In such a scenario, it was not open to the adjudicating as also to appellate authority to go for the alternative availability of N/N. 41/2007-ST, dated 06.10.2007 and decide the issue in terms of the said notification, instead of deciding the refund claims in terms of Rule 5 under which the same were filed. Even though, the learned Advocate submits that Notification No.41/2007-ST, dated 06.10.2007 also grants relief to the assessee, inasmuch as, the period of limitation provided in terms of the said notification for filing refund claims was subsequently extended, such refunds are otherwise admissible in terms of Rule 5. Matter remanded to original authority to examine the documentary evidences in support of the refund claims - appeal allowed by way of remand. Issues:1. Refund of accumulated unutilised Cenvat credit of duty for post removal services.2. Applicability of Rule 5 of Cenvat Credit Rules, 2004 vs. Notification No.41/2007-ST, dated 06.10.2007.3. Time-limit aspect under Notification No.41/2007-ST, dated 06.10.2007 for filing refund claims.Analysis:Issue 1: Refund of accumulated unutilised Cenvat credit of duty for post removal servicesThe appellants, engaged in the manufacture and export of cotton yarn, claimed a refund of accumulated unutilised Cenvat credit of duty for services like Port Services, Courier Services, and GTA Services. The Revenue objected to the refund claims, stating that these services were post removal services and not covered under the definition of 'Input Services' under Rule 2(l) of Cenvat Credit Rules, 2004. The Assistant Commissioner observed that although these services were eligible for refund under Notification No.41/2007-ST, dated 06.10.2007, the refund claims were beyond the limitation period specified in the notification. The Commissioner (Appeals) upheld this decision, rejecting the appellants' argument that the refund was claimed under Rule 5 of Cenvat Credit Rules, 2004, and not under the said notification.Issue 2: Applicability of Rule 5 vs. Notification No.41/2007-ST, dated 06.10.2007The appellants contended that their refund claims were filed under Rule 5, allowing the refund of unutilised credit. They argued that the services in question, such as Port Services, were cenvatable in case of exports, citing various Tribunal decisions. The Revenue, however, maintained that the refund claims were made under Notification No.41/2007-ST, dated 06.10.2007, and not under Rule 5. The Tribunal noted that the adjudicating authority's insistence on applying the notification instead of Rule 5 was incorrect. The Tribunal held that the refunds were indeed filed under Rule 5, and the alternative availability of the notification for deciding the issue was not appropriate. The Tribunal allowed the appeals on legal issues and remanded the case to the original authority for further examination of documentary evidence.Issue 3: Time-limit aspect under Notification No.41/2007-ST, dated 06.10.2007The Revenue argued that the refund claims did not meet the time-limit aspect specified in Notification No.41/2007-ST, dated 06.10.2007, leading to the rejection of the claims. However, the Tribunal found that the refunds were admissible under Rule 5 of Cenvat Credit Rules, 2004, irrespective of the extension of the time limit in the said notification. The Tribunal emphasized that the refunds should be considered under Rule 5 and directed the original authority to review the documentary evidence provided by the appellants for further consideration.In conclusion, the Tribunal clarified the applicability of Rule 5 for refund claims and directed a reevaluation based on the evidence presented, emphasizing that the refunds were valid under Rule 5 and not subject to the limitations of Notification No.41/2007-ST, dated 06.10.2007.