CENVAT refund cannot be denied for belated debit where delay is procedural and input service use is established

Refund under Notification No. 27/2012-CE read with Rule 5 of the CENVAT Credit Rules, 2004 could not be denied merely because the CENVAT account was debited after filing the claim, since the delay was treated as procedural and the substantive refund entitlement remained intact. Event Management Service was also treated as an input service because it was used in the course of business within Rule 2(l), so refund on that component was allowable. On that basis, rejection of the refund claim was set aside and consequential relief followed.

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Issues: (i) whether delay in debiting the CENVAT account at the time of filing the refund claim under Notification No. 27/2012-CE read with Rule 5 of the CENVAT Credit Rules, 2004, disentitled the claimant from refund; (ii) whether Event Management Service qualified as an input service for refund purposes.

Issue (i): whether delay in debiting the CENVAT account at the time of filing the refund claim under Notification No. 27/2012-CE read with Rule 5 of the CENVAT Credit Rules, 2004, disentitled the claimant from refund.

Analysis: The refund claim was supported by subsequent debit of the CENVAT account, and the delay was treated as only procedural. The Tribunal held that the right to refund could not be defeated merely because the debit was made later, especially where the service tax regime had already given way to GST and the credit had not been transitioned into the new regime. The authorities cited by Revenue were distinguished on facts, while the line of decisions relied on by the appellant supported the view that delayed debit does not extinguish the substantive refund entitlement.

Conclusion: The delay in debiting the CENVAT account did not bar the refund claim and the finding of rejection on that ground was unsustainable.

Issue (ii): whether Event Management Service qualified as an input service for refund purposes.

Analysis: The service was found to have been used in the course of business and to fall within the scope of input service under Rule 2(l) of the CENVAT Credit Rules, 2004. On that basis, the denial of refund of the minor amount related to that service was held to be unjustified.

Conclusion: Event Management Service was held to be an input service and the refund on that component was allowable.

Final Conclusion: The rejection of the refund claim was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: A refund under the CENVAT credit scheme cannot be denied merely because the CENVAT account was debited belatedly, where the delay is procedural and the substantive entitlement to refund otherwise exists, and services used in the course of business may qualify as input services for refund purposes.

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