Cenvat credit refund on commission-linked export services requires fresh statutory examination under Rule 5 and the refund notification.

Refund of accumulated Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2002, read with Notification No. 5/2006-C.E. (N.T.), was examined in relation to service tax paid on commission for sales activities connected with exported goods. The dispute was whether such commission-related services qualified for refund, with the departmental view being that they were not used in manufacture of final products and therefore fell outside the refund scheme. The appellate order was set aside because the issue had not been examined on the correct statutory footing, and the matter was remitted for fresh consideration.

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Issues: Whether refund of accumulated Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2002, read with Notification No. 5/2006-Central Excise (N.T.) dated 14-3-2006, was admissible on service tax paid on commission relating to sales activities of exported goods.

Analysis: The refund claim was based on unutilised credit of service tax paid on commission for sales activities, while the departmental objection was that such service was not used in the manufacture of final products and therefore did not fall within the scope of refund contemplated by Rule 5 and the notification. The order of the Commissioner (Appeals) had proceeded on a different footing without examining the disputed issue from the correct statutory angle.

Conclusion: The matter required fresh consideration by the appellate authority and the earlier order was set aside.

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