Unutilized Cenvat credit refund for input services survives despite later notification and applies to the earlier period.

Refund of unutilized Cenvat credit on service tax paid for input services was held admissible for the period before 14-03-2006 under Rule 5 of the Cenvat Credit Rules, 2004. The substantive entitlement to refund for export-related accumulated credit was treated as arising from the rule itself, and the later notification issued on 14-03-2006 was applied to the earlier period. The absence of an earlier notification prescribing procedural safeguards or the refund mechanism did not defeat the claim, so the refund could not be denied on that ground.

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Issues: Whether refund of unutilized Cenvat credit of service tax paid on input services was admissible for the period prior to 14-03-2006 under rule 5 of the Cenvat Credit Rules, 2004.

Analysis: Rule 5 of the Cenvat Credit Rules, 2004 provided for refund of accumulated credit where export-related credit could not be utilized. The absence of an earlier notification prescribing the mechanism and safeguards did not take away the substantive entitlement created by the rule. A subsequent notification issued on 14-03-2006 was held to apply to the earlier period as well, and the earlier contrary view of the lower authority was rejected.

Conclusion: Refund of unutilized input service credit could not be denied merely because the notification was issued only on 14-03-2006, and the assessee was entitled to the refund claim.

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