Appellate Tribunal rules in favor of appellant, directs refund of accumulated CENVAT Credit.

The Appellate Tribunal CESTAT Mumbai held that the denial of refund of accumulated CENVAT Credit to the appellant without issuing a show cause notice invoking Rule 14 of CENVAT Credit Rules, 2004 was not sustainable in law. The Tribunal set aside the order rejecting the refund and directed the Revenue to refund Rs. 25,81,828/- to the appellant.

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Issues Involved:
The issues involved in the judgment are the denial of refund of accumulated CENVAT Credit to the appellant and the absence of a show cause notice invoking Rule 14 of CENVAT Credit Rules, 2004.

Denial of Refund of Accumulated CENVAT Credit:
The appellant, an exporter of Information Technology Software Service, had accumulated CENVAT Credit of around Rs. 12 crores for the quarter from April 2017 to June 2017. A claim for refund was filed under Notification No. 27/2017-CE (NT) dated 18.06.2012. Subsequently, a deficiency memo was issued to the appellant, and an Order-in-Original was passed rejecting a portion of the refund claim. The appellant appealed before the Commissioner (Appeals), who partially allowed and remanded some parts but rejected a refund of Rs. 25,81,828/-. The appellant contended that the rejected amount pertained to Service Tax paid on various activities and properties, and no show cause notice invoking Rule 14 of CENVAT Credit Rules, 2004 was issued. The Tribunal observed that the deficiency memo did not invoke any provisions of the CENVAT Credit Rules, especially Rule 14, and thus, could not be considered a show cause notice. Consequently, the Tribunal held that the denial of the refund without a proper show cause notice was unsustainable in law. Therefore, the Tribunal set aside the part of the order rejecting the refund of accumulated CENVAT Credit and directed the Revenue to refund Rs. 25,81,828/- to the appellant.

Conclusion:
In conclusion, the Appellate Tribunal CESTAT Mumbai, in the case involving the denial of refund of accumulated CENVAT Credit to the appellant, held that the rejection of the refund without issuing a show cause notice invoking Rule 14 of CENVAT Credit Rules, 2004 was not sustainable in law. Therefore, the Tribunal allowed the appeal and directed the Revenue to refund the accumulated CENVAT Credit of Rs. 25,81,828/- to the appellant.

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