2020 (7) TMI 116 - AT - Central Excise

Tribunal grants Cenvat Credit for Outward Freight Charges, emphasizes consistency in refund process.

The tribunal held that the appellant was entitled to Cenvat Credit for Outward Freight Charges as the refund for the same had been granted previously and ... Refund of CENVAT Credit - export of goods - input services or not - Outward Freight Charges i.e. Indian Customs Ports to foreign destination for transportation of export goods - HELD THAT:- The appellant have been exporting their goods and in context of export of goods they had claimed refund in respect of Input Services used in relation to the export of goods under Rule 5 of Cenvat Credit Rules, 2004 - It is obvious that the refund claim under Rule 5 is sanctioned only after ascertaining the admissibility of Cenvat Credit in respect of Input Service for which the refund is sought for. Therefore, the issue of admissibility of Input Service has been clearly examined by the refund sanctioning authority and the issue attained finality therefore, subsequently issue the Show Cause Notice on the same Input Service Credit is not proper and legal. Revenue cannot take two yard sticks, one for allowing the refund and other for allowing the Cenvat Credit. Time Limitation - HELD THAT:- The appellant have been filing the refund claim periodically from 2013 onwards in respect of the Input Service which is the subject matter in this case. Moreover appellant had been filing ER2 returns regularly. Therefore there is no suppression of fact on the part of the appellant, hence the demand is also hit by limitation. Appeal allowed - decided in favor of appellant. Issues involved: Whether the appellant is entitled to Cenvat Credit for Outward Freight Charges related to transportation of export goods and whether the demand is time-barred due to no suppression of facts.Analysis:1. Entitlement to Cenvat Credit for Outward Freight Charges:- The appellant had applied for a refund claim for Outward Freight Charges under Rule 5 of the Cenvat Credit Rules, 2004, for the same period in question. The refund was granted by the sanctioning authority after examining the eligibility of the Cenvat Credit. This was evidenced by various Orders In Original sanctioning the refund, which were accepted by the revenue without further appeal.- The appellant had been exporting goods and claimed refund for Input Services used in relation to the export of goods, including Outward Freight Charges. The refund sanctioning authority had already examined the admissibility of Cenvat Credit for Input Services, including Outward Freight Charges, and the issue had attained finality. Therefore, raising objections on the admissibility of Input Service Credit subsequently was deemed improper and not legally valid.- The tribunal also noted that the appellant had been filing refund claims periodically since 2013 for the same Input Service, and had been regularly filing ER2 returns. This indicated no suppression of facts on the part of the appellant, further supporting the admissibility of the Cenvat Credit for Outward Freight Charges.2. Time-barred Demand due to No Suppression of Facts:- The majority of the demand made under the extended period was considered time-barred as there was no suppression of facts. The appellant had been diligently filing ER2 returns, and since there was no specific column in the return for disclosing the nature of service, the tribunal found no suppression of facts on the appellant's part.- Citing the tribunal judgment in the case of COMMISSIONER OF CENTRAL EXCISE, INDORE V. MEDICAPS LTD., it was argued that the demand was hit by limitation due to the absence of any suppression of facts by the appellant.3. Conclusion:- After considering the submissions from both sides and examining the records, the tribunal concluded that the demand in the present case was not sustainable. Therefore, the impugned order was set aside, and the appeal was allowed with consequential reliefs. The tribunal emphasized that the revenue cannot adopt different standards for allowing refunds and granting Cenvat Credit, especially when the admissibility of Input Service had already been settled through the refund process.This detailed analysis of the judgment from the Appellate Tribunal CESTAT AHMEDABAD highlights the key issues of entitlement to Cenvat Credit for Outward Freight Charges and the time-barred nature of the demand due to no suppression of facts, providing a comprehensive understanding of the legal reasoning and conclusions reached by the tribunal.