TaxTMI 
TaxTMI 
2019 (6) TMI 861
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....credit in respect of Service Tax charged by such input service providers. Appellant filed Application in the prescribed form, in respect of both places of service, to claim refund of accumulated Cenvat credit as per the provisions of Rule 5 of the Rules, in the month of June, 2013 for the relevant period. Assistant Commissioner, Service Tax Cell, Central Excise, Pune -III, after obtaining several details, passed two impugned Orders-inOriginal and rejected the refund claims of Rs. 21,56,70,260 and Rs. 45,13,435 in respect of both these places and allowed the claim only of Rs. 4,68,21,662 and Rs. 22,53,455. Assistant Commissioner held that an amount of Rs. 14, 52,519 in respect of Magarpatta and Rs. 2,85,897 in respect of Onyx Building, are inadmissible Cenvat credit on technical grounds. Being aggrieved by the said Orders, the Appellant preferred two Appeals before the Hon'ble Commissioner (Appeals), Pune. Learned Commissioner (Appeals) upheld the denial of refund of Rs. 45, 13,435 in respect of Onyx Building and upheld the denial of refund in respect of Magarpatta, after sanctioning additional refund of Rs. 89, 558; representing the Cenvat credit in respect of alleged inadmissi....
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....llants also submits that it is important to appreciate the difference between "export turnover of goods" and "export turnover of services"; considering Rule 5(1)(C) of the Rules, the clearance of goods is the decisive factor for ascertaining export of goods in the relevant period; whereas considering Rule 5(1)(D) of the Rules, the export turnover of services is linked to value of turnover of service calculated in the prescribed manner, the consideration for which service (payment) is received during the relevant period for export of services. Thus, differentiation in the basic criteria to ascertain the turnover of export of goods and export of services needs to be considered while applying the formula to ascertain the maximum permissible refund of Cenvat credit in a given quarter. This clearly demonstrates that for 100% service exporter the receipt of payment in convertible foreign exchange is important and utilizing the input services or availment of Cenvat credit in respect of input services are not relevant as they may be relevant for an exporter of goods. 2.3. Learned Counsel for the appellants submits that the entire purpose of grant of refund of Cenvat credit is to ensure ....
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....tted as very objective of grant of refund of Cenvat credit to an exporter gets defeated; a substantive benefit should not to be denied just for some procedural aspects. This was emphasized by Circular No.120/01/2010 S.T. dated 19 January, 2010 and Notification No.27/2012 C.E.(N.T.) dated 18 June, 2012, providing for Procedures, Safeguards and Conditions for claiming refund under Rule 5 of the Rules. In the Order-in-Original for Onyx Building denial of Cenvat credit was on technical grounds; there was no allegation that invoices do not reflect the same or the services were not availed or Service Tax was not paid. No Show Cause Notice was issued before denial of Cenvat credit while the same was decided while deciding the refund. He submits that in terms of Rule 9(2) (proviso) of the Rules the said credit cannot be denied to the Appellant; if at all any verification is required by the authorities the same needs to be allowed after such verification. 2.5. Learned Counsel relied upon the following case law for each of the points he raised, as follows. S.No. Point Raised Case Law cited 1 No one to one correlation is required in case of refund of accumulated credit  ....
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....s per Rule 5(2) CCR, 2004 as amended, the new Rule 5 will apply to exports made on or after 1st April, 2012. As per proviso to Sub-Rule (2) "Provided that the refund may be claimed under this Rule, as existing, prior to the commencement of the CENVAT Credit (Third Amendment) Rules, 2012, within a period of one year from such commencement." It has been postulated that Credit pertaining to earlier period which was allowed under earlier Rule can be claimed only till 1st April, 2013. In the instant case, Refund claim has been filed on 28.06.2013. Hence as per statutory provision, the appellant cannot claim refund pertaining to earlier period post 1St April, 2013 nor export prior to April, 2012 is to be considered. (iii). Issue as to whether refund is eligible only of that credit which is accumulated during the said quarter or the accumulated credit of the past period can also be refunded, was clarified as per Para 2(d) of the Circular No. 120/01/2010-ST dated 19 Jan, 2010. It was clarified that that there should not be any objection in allowing refund of credit of the past period in subsequent quarters; the input credit taken in quarter during which there is no export is carri....
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....ppellants plead that in view of the interpretation of the provisions of Cenvat Credit and Refund by various Courts and Tribunals and in view of the Circular issued by CBEC, a lenient view in favour of the appellants needs to be taken by the Revenue, the Revenue is of the opinion as far as there is no uncertainty in the wordings of the Rules and Notifications, there is no scope for liberal view can be taken. For a better appreciation of the provisions of the Notification, it is required to go through the provisions therein. 5.1. Rule 5 of CCR as it existed before amendment is as follows: Rule 5. Refund of CENVAT credit- Where any input or input service is used in the manufacture of final product which is cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate product cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed to be utilized by the manufacture or provider of output service towards payment of, (i) Duty of excise on any final product cleared for home consumption or for export on payment of duty; or ....
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....ught out goods sold, during the given period. 5.3. The amended Rule 5 by virtue of as on 01.04.2012 reads as under: "Rule 5 Refund of CENVAT Credit - (1) A manufacturer who clears a final product or an intermediate product for export without payment of duty under bond or letter of undertaking, or a service provider who provides an output service which is exported without payment of service tax, shall be allowed refund of CENVAT credit as determined by the following formula subject to procedure, safeguards, conditions and limitations, as may be specified by the Board by notification in the Official Gazette: Refund amount = (Export turnover of goods + Export turnover of services x Net CENVAT Credit Total turnover Where, (A) "Refund amount" means the maximum refund that is admissible; (B) "Net CENVAT credit" means total CENVAT credit availed on inputs and input services by the manufacturer or the output service provider reduced by the amount reversed in terms of sub-Rule (5C) of Rule 3, during the relevant period; (C) "Export turnover of goods" means the value of final products and intermediate products cleared during the releva....
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....als with total Cenvat Credit availed on input services by the output service provider whereas the second part deals with reduction in the total Cenvat credit, which is to be reduced in terms of sub-Rule (5C) of Rule 3 of the Rules during the relevant period. Sub-Rule (5C) of Rule 3 of the CENVAT Rules deals with remission of duty as per the provisions of Rule 21 of the Central Excise Rules and therefore, is relevant to the present issue. Therefore, the words 'during the relevant period' are related to second part of the definition of net Cenvat credit and not the first part of the said Notification and not to the Cenvat credit availed----- which will invariably include the opening balance for the period for which refund claim i.e. credit availed for earlier period also. The Revenue pleads that the above interpretation is incorrect; it is apparent that so far as definition of 'net Cenvat credit' is concerned, it consists of a difference of credit availed on input/input services as reduced by the amount pertaining to Rule 3 (5C) ibid which is necessarily followed by "," before during the relevant period. We find that the formula given for the calculation of eligible refund and the....
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....the conditions, safeguards, limitations, etc. is not given to either Quasi Judicial Authorities or to the officers. They are bound by these notifications as they are drafted. The first appellate authority has erred in holding that the Rule 5 of CENVAT Credit Rules does not prescribe any conditions or restrictions. In fact, it does delegate the power of deciding these conditions to the Board. The first appellate authority or any other Quasi-Judicial Authority has no right to amend or modify the conditions of the notifications even if it is his opinion that the conditions or notifications are unreasonable or are not conducive to promote the exports from India. Unfortunately, the first appellate authority took this position and decided to relax the conditions laid down in the notification. The five member Constitutional Bench of the Apex Court in the case of Commissioner of Customs (imports), Mumbai v. M/s Dilip Kumar & Co. in Civil Appeal No. 3327 of 2007 held that: "20. In applying rule of plain meaning any hardship and inconvenience cannot be the basis to alter the meaning of the language employed by the legislation. This is especially so in fiscal statutes and penal statu....