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of <h1>Tribunal remands refund calculation back to Deputy Commissioner under Rule 5</h1> <h3>Value Labs LLP Versus Commissioner of Customs, Central Excise & Service Tax, Hyderabad</h3> Value Labs LLP Versus Commissioner of Customs, Central Excise & Service Tax, Hyderabad - TMI Issues:Refund of CENVAT credit under Rule 5 of CENVAT Credit Rules, 2004 read with Notification No. 27/2012-CE (NT) for the period April, 2014 to March, 2015.Analysis:The appellant applied for a refund of CENVAT credit and produced necessary documents. The Deputy Commissioner issued a show cause notice questioning the refund claim. After due process, the Deputy Commissioner sanctioned a refund but rejected a portion, stating some input goods or services were not used for providing output services. The appellant appealed to the Commissioner (Appeals) who allowed refund for some input services and disallowed the rest. The appellant challenged this decision, arguing that the refund should be governed by the formula in Rule 5 of CENVAT Credit Rules and Notification No. 27/2012-CE.The Tribunal analyzed Rule 5 of CENVAT Credit Rules, which provides a formula for refund of CENVAT credit when goods or services are exported. The rule allows a manufacturer or service provider to claim a refund of CENVAT credit based on a specified formula, irrespective of whether the input goods or services are directly related to the exported output goods or services. The Tribunal emphasized that once input credit is allowed, the exporter is entitled to a proportionate refund of CENVAT credit, regardless of the specific input goods or services involved. The Tribunal clarified that if any wrongly availed CENVAT credit needs to be recovered, it should be done through a separate process under Rule 14 of CENVAT Credit Rules, not through the refund mechanism under Rule 5.Consequently, the Tribunal remanded the matter back to the Deputy Commissioner to determine the refund amount applying the formula specified in Rule 5 of the CENVAT Credit Rules. The Tribunal allowed the appeal by way of remand, emphasizing that the calculation of the refund should strictly adhere to the provisions of Rule 5, and any recovery of erroneously availed credit should follow the appropriate procedure under the law.
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