TaxTMI 
TaxTMI 
2018 (3) TMI 771
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....his the department has filed these appeals. Appeal No. ST/426/2010 2. The period of refund claim filed by respondent is January 2006 to March 2006. Subsequently respondent filed revised refund claim for the period March 2006 only and requested to process the refund claim. Vide letter dated 3.5.2007, respondents had stated that Notification No. 8/2003 dated 20.6.2003 exempted services rendered by call centres till 28.2.2006 and in view of that exemption restricted their claim to March 2006 alone. It is also stated that the respondents requested to process the refund claim in this appeal without issue of any show cause notice. Thus, after adjudication, the refund sanctioning authority rejected the refund to the extent of Rs. 51,44,441/- pertaining to services for the period January 2006 and February 2006 and also Rs. 9,167/- being the ineligible credit on input services namely Air Travel Agent Service for the period March 2006. The refund sanctioning authority allowed the balance claim to the extent of Rs. 1,99,670/- for the period March 2006. Against the said rejection, the respondent filed appeal before Commissioner (Appeals) and vide order impugned herein, the Commissioner (....
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....f Finance Act, it is considered as an exempted service. Consequently, an output service provider is barred from availing CENVAT credit irrespective of the fact that the said service is provided to DTA or exported. If such output service provider takes such credit then it is wrong availment of credit and such credit is ab initio void. In the present case, output service provided by the respondent was exempted from payment of service tax vide the aforesaid notification 8/2003 and accordingly the respondent is not entitled to take CENVAT credit. Even though the output service was exported, the credit being ab initio void, there is no question of refunding the unutilized credit. That the Commissioner (Appeals) erred in allowing refund without examining the provisions of Rule 6 of CENVAT Credit Rules, 2004. He therefore requested to set aside the sanction of refund ordered by the Commissioner (Appeals). 4. The ld. counsel Shri Joseph Prabhakar appeared on behalf of the respondent and argued the matter. The break-up of the details of refund claim rejected by the original authority in Appeal No. ST/426/2010 is given by him as under:- a. Claim pertaining to period before 1st March....
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.... not contesting the claims made under Sl. (b) to (e). Appeal No. ST/609/2010 6. As regards the above appeal, the respondents had filed refund claim for an amount of Rs. 2,47,43,758/- for the period November 2006. The original authority sanctioned refund to the tune of Rs. 1,22,50,381/- and rejected the balance amount of Rs. 1,24,93,377/-. On appeal, Commissioner (Appeals), set aside the rejection and allowed the balance refund of Rs. 1,24,93,377/-. Hence department has filed this appeal against the order of Commissioner (Appeals) allowing refund of Rs. 1,24,93,377/-. The break-up of Rs. 1,24,93,377/- is as follows:- a. Certain input services like Rent-a-cab, Event Management, Video Production Agency, Real Estate Agency, Packaging Activity, Clearing and Forwarding Agency, Maintenance / Repair Services were held to be ineligible Rs.6,14,934/- b. Original Invoices Rs.1,79,070/- c. Invalid claim Rs.7,102/- d. Arithmetical error Rs.61,044/- e. Other ground Rs.1,708/- f. Claim pertaining to period before 1st March 2006 rejected due to Notification No.8/2003 exempting services by call centre Rs.1,16,29,519/- Total ....
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....s exported without payment of service tax shall be allowed refund of unutilized CENVAT credit used for providing the output service. The Notification No.5/2006-CE(NT) dated 14.3.2006 lays down conditions and limitations. This notification does not put forward any condition as alleged by the department. The only condition provided in Rule 5 is that the facility of refund will not be available if the manufacturer or service provider claims rebate of duty / service tax. 8.2 Rule 5 does not use the word exempted goods/ services . Thus, when Rule 6 of CENVAT Credit Rules specifically uses the word exempted goods / exempted service in order to explain eligibility to avail credit, Rule 5 which precedes the said Rule does not make any such distinction. It merely states that the manufacturer of the final product or service provider of a taxable service which is exported is eligible for refund of unutilized credit. The Rule has consciously used the words final product / output service . A final product may be both dutiable or exempted. Similarly, an output service may be both taxable service or exempted service. When the rule merely uses the words final product / output service , the only....