2018 (7) TMI 91 - AT - Service Tax

Tribunal decisions: Credit eligibility, Circular declaration, invoice timelines clarified

The Tribunal upheld the eligibility of credit availed before 14.3.2006, set aside the directive on the Circular declaration, and sustained the remand for ... 100% EOU - refund of unutilized CENVAT Credit which was availed prior to 14.3.2006 - Held that:- The said issue stands decided in the case of WNS Global Services (P) Ltd. [2008 (1) TMI 94 - CESTAT, MUMBAI] where it was held that N/N. 5/2006 does not state that the exports have to be made after 14.3,2006 to be eligible for refund of unutilized credit - it does not debar the refund of unutilized credit pending in the CENVAT account of the assessee on the date when the notification has come into existence - refund allowed - appeal allowed. Issues:1. Refund claim rejection based on lack of nexus between input and output services, mismatch in export turnover, and eligibility of credit availed prior to a specific date.2. Commissioner (Appeals) directing the filing of a declaration as per Circular dated 19.1.2010 and remanding the matter for verification of input services eligibility.3. Challenge to the requirement of raising invoices within 14 days under Rule 4A of Service Tax Rules.Analysis:1. The appellant, a 100% EOU, sought a refund of unutilized CENVAT credit on input services for exported output services. The refund was rejected due to perceived lack of nexus between input and output services, mismatch in export turnover, and ineligibility of credit availed before 14.3.2006. The Commissioner (Appeals) upheld the rejection on the date issue but directed reconciliation on other grounds. The Tribunal ruled that the appellant is eligible for credit availed before 14.3.2006 as per established case law and dismissed the rejection based on the date.2. The Commissioner (Appeals) directed the filing of a declaration per Circular dated 19.1.2010 and remanded the matter for input services eligibility verification. The Tribunal found the directive on the declaration untimely and set it aside. However, the remand for verification was upheld, emphasizing consideration of older case laws and the broader definition of input services pre-2011.3. The department challenged the requirement under Rule 4A to raise invoices within 14 days. The Tribunal agreed with the Commissioner (Appeals) that this was a procedural requirement and not a condition specified in the relevant notifications or rules. The department's appeal was dismissed, affirming the Commissioner's view on Rule 4A compliance.In conclusion, the Tribunal upheld the eligibility of credit availed before 14.3.2006, set aside the directive on the Circular declaration, and sustained the remand for input services verification. The requirement to raise invoices within 14 days under Rule 4A was deemed procedural and not mandatory. The Tribunal directed the adjudicating authority to process the refund claim in line with these findings.