TaxTMI 
TaxTMI 
2022 (11) TMI 1190
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....ble input services in terms of Rule 2(l) of Cenvat Credit Rules, 2004 being no nexus with the output services? 3. The period in dispute is October, 2016 to June, 2017 and the refund claim in dispute is Rs.21,18,014/-. The appellants herein were providing taxable output services viz. banking and other financial services and availing Cenvat Credit of the Service Tax paid on various input services used by them in providing the said output services. The appellants filed two refund claims before the concerned authorities under Rule 5 of Cenvat Credit Rule, 2004 r/w notification No.27/2012-CE (NT) dated 18.6.2012 in respect of the accumulated Cenvat Credit on the grounds that the output services provided during the periods in dispute viz. 1.10.2016 to 31.3.2017 & 1.4.2017 to 30.6.2017 respectively had been exported and they were not in a position to utilize the Cenvat credit availed on the said input services. The Adjudicating Authority vide separate Orders-in-Original dated 15.2.2018 and 10.5.2018 respectively rejected the refund claims on Business Auxiliary Service, Business Travel Services, General Insurance Services, Event Management Service, Business Support Service and Membershi....
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....failed to produce any tangible documentary evidence in support of their submissions that the services had nexus with the output service and therefore the authorities below have rightly rejected refund claim. 5. I have heard learned Counsel for the appellant and learned Authorised Representative for the Revenue and perused the case records including the synopsis & case laws placed on record by the learned counsel. The first objection raised by the learned counsel is non-issuance of show cause notice for rejecting the refund. There is no doubt that Rule 5 ibid provides for refund of accumulated Cenvat credit subject to compliance of the procedure/ guideline laid down in the notifications issued thereunder. The refund of Cenvat credit on the services in issue was mainly denied to the Appellant on the ground of 'no nexus' between the input services and the export services. But the question herein is whether the department can deny refund of Cenvat credit under Rule 5 ibid alleging that there was no nexus between the output and input services. It is settled legal position that denial of Cenvat credit can be done only by issuing notice under Rule 14 ibid and the department cannot reje....
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.... there is a provision to determine the correctness about the availment of Cenvat credit. Its only Rule 14 ibid which provides for recovery of irregularly availed Cenvat credit. I find force in the submission of Learned Counsel that since availment of credit has not been questioned by the department in terms of Rule 14 ibid, the refund benefit cannot be denied on the ground of non-establishment of nexus between input and the output services. This Tribunal in Appellant's own case on an identical issue, for the period April, 2012 to March, 2013 and April, 2016 to September, 2016 in the matter of M/s. BNP Paribas India Solutions Pvt. Ltd. v. Commissioner of CGST, Mumbai East reported in 2020 (2) TMI 224- CESTAT Mumbai, set aside the denial of refund by the department to the Appellant on the ground of non-establishment of nexus between the input and output services, after discussing Rule 5 ibid in detail. The relevant extract of the said order is as under : "xxxx xxxx xxxx 6. Rule 5 of the Cenvat Credit Rules was substituted by Notification No. 18/2012-C.E. (N.T.), dated 17-3-2012 (w.e.f. 1-4-2012). Under the said substituted rule, it has been provided that the manufacturer ....
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....he service provider. Consequent upon substitution of the said Rule in the Union Budget-2012, the Tax Research Unit (TRU) of CBEC vide letter dated 16-3-2012 has clarified as under :- "F.1 Simplified scheme for refunds : 1. A simplified scheme for refunds is being introduced by substituting the entire Rule 5 of Cenvat Credit Rules, 2004. The new scheme does not require the kind of correlation that is needed at present between exports and input services used in such exports. Duties or taxes paid on any goods or services that qualify as inputs or input services will be entitled to be refunded in the ratio of the export turnover to total turnover. 2. xx xx xx 4. On perusal of the statutory provisions read with the clarifications furnished by the TRU, it transpires that under the substituted Rule 5 of the rules, there is no requirement of showing the nexus between the input service and the output service provided by the assessee. Since the refund under the said amended rule is governed on the basis of receipt of export turnover to the total turnover, establishing the nexus between the input and output service cannot be insisted upon for consideration of the....