TaxTMI 
TaxTMI 
2025 (6) TMI 1092
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly), as proposed in the SCN, filed by M/s. Headstrong Services India Pvt. Ltd., D-4, Sector-59, Noida. Under rule 5 of the CENVAT Credit Rules, 2004 read with Notification no. 05/2006-CE (NT) dated 14.03.2006." 2.1 Appellant is registered with the Service Tax vide Registration no. AABCT7650DST001 for providing taxable services namely Management Consultants, Renting of Immovable Property Services, manpower Recruitment Agency, Maintenance or Repair Service, Transport of Goods By Road, Information Technology Software Service and Business Auxiliary Services falling under Section 65 (105) (r), (zzzz), (k), (zzg), (zzp), (zzzze) and (zzb) of the Finance Act, 1994 as amended. They are availing facility of CENVAT in respect of input services being used in providing of output services under Cenvat Credit Rules 2004. 2.2 Appellant filed on 28.12.2012 filed a claim under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. Notification No. 05/20006-Central Excise (N.T) dated 14.03.2006 for refund of Rs. 31,73,673/- in respect of unutilized Cenvat Credit of Service Tax involved on input services claimed to have been used for providing output services during the period Jan'12 to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce with law. * It is settled law for claiming credit, requirement of registering the premises is not a pre-condition. Reliance is placed on the following: * mPORTAL India Wireless Solutions P. Ltd. [2012 (27) S.T.R. 134 (Kar.)] * Right Step Consulting Pvt. Ltd. [2023 (8) TMI 614- CESTAT Allahabad] * DMG Polypack Pvt. Ltd. [2024 (12) TMI 347 - CESTAT Allahabad] * Tata Business Support Services Ltd. [2021 (44) G.S.T.L. 169 (Tri. ⁃ Mumbai)] * ABM Knowledge Ltd. [2019 (027) GSTL 0694 (Tri. Bom)] * all the input services on which credit have been claimed are used by them to provide output services as detailed in the grounds of appeal and submitted before lower authorities. * Without prejudice to the above, perusal of the SCN indicates that the refund was sought to be rejected challenging validity of credit claimed on the above grounds without there being any demand raised against the Appellant under Rule 14 of the CCR. It is settled law that CENVAT credit claimed cannot be questioned or challenged at the stage of processing of refund. Reliance placed on * Circular No. 120/ 01/ 2010-ST dated 19.01.2010 * Qualcomm India Pvt. Ltd. [2020 a) (43) G.S.T.L. 402 (Tri.-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he ground that the Appellant could not produce the relevant documents viz BRC/ FIRCs, GAR-7 Challans, import invoices etc., supporting their claim, and also because the information provided by the Appellant in the refund claim was not correlated with the supporting documents. The adjudicating authority has further observed that the CENVAT credit has been availed on service tax paid on unregistered premises and there is no nexus with the output service tax, and no substantial evidence has been placed on record regarding receipt of the impugned services or their use in their unit for providing output service. 9. I find that Rule 3(1) of the Cenvat Credit Rules, 2004 provides that a manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit inter alia of the Service Tax leviable under Section 66 of the Finance Act, paid on the following: (i) any input or capital goods received in the factory of manufacture of final product or premises of the provider of output service on or after the 10th day of September, 2004; (ii) input service received by the manufacturer of final product or by the provider of output services on or after the 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pellant to prove that the aforesaid disputed services have been used for manufacture of goods or for providing output service and has failed to show how the provision of these services has any nexus with the manufacturing/clearance process of their final products, to substantiate their claim, as observed in the impugned order. 12. 1 find that the adjudicating authority has also denied the CENVAT credit on the ground that the Appellant could not produce BRC/FIRCs and other corresponding material evidence in support of their refund claim. I find that the Appellant has failed to discharge their responsibility, in as much as they did not furnish the supporting documents or plausible explanation neither before the adjudicating authority nor before me during the personal hearing or with their grounds of appeal. 13. In view of the foregoing discussions it is concluded that the, Appellants could not make any strong assertion against the impugned order and in absence of sufficient material evidence on record by the Appellant to substantiate his claim and denial of refund on this ground by the adjudicating authority is justified." 4.3 From the impugned order it is evident that the refun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cerned, Rule 14 ibid clearly mandates that in case of irregular availment of credit or its utilisation, such credit can be recovered from the assessee and for effecting the recoveries, the provisions of Section 11A of the Central Excise Act, 1944/Section 73 of the Finance Act, 1994 shall apply mutatis mutandis. It is an admitted fact on record that the department has not invoked the provisions of Rule 14 ibid for effecting recovery of the alleged irregular Cenvat credit availed by the assessee-Appellant. Thus, under such circumstances, it can be said that taking of Cenvat credit on the disputed services by the Appellant is in conformity with the Cenvat statute. Rule 5 ibid nowhere specifies that Cenvat credit can be denied on the ground of irregular availment or utilisation of the same. Thus, in absence of specific provisions contained in the statute, denial of the refund benefit provided under Rule 5 ibid, in our considered opinion, cannot stand for judicial scrutiny. Since the department has not specifically alleged regarding actual exportation of services by the assessee-Appellant and use/utilization of disputed services for such activities, benefit of refund should be available....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndia Pvt. Ltd. (supra) has been affirmed by the Hon'ble High Court of Hyderabad in 2021-TIOL-2305-HC-TELANGANA-ST by dismissing the appeals filed by the Revenue against the aforesaid decision of Tribunal." 4.7 I also take note of the Circular No 120/1/2010-ST dated issued by CBIC clarifying the entire issue as follows: Subject: Problems faced by exporters in availing refund of excess credit - regarding CENVAT Credit Rules, 2004 permit taking of credit of inputs and input services which are used for providing output services or output goods. In order to zero-rate the exports, Rule 5 of CENVAT Credit Rules, 2004 provides that such accumulated credit can be refunded to the exporter subject to stipulated conditions. Notification No. 5/2006-CE (NT) dated 14.03.2006 provides the conditions, safeguards and limitations for obtaining refund of such credit. 2. It has been represented by the exporters of services (mainly the call centres or the BPOs) that they are facing difficulties in getting refund under the said notification. In order to ascertain the causes for such delay a number of meetings were held with the refund sanctioning authorities. During these meetings the office....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s cash flow problems for the exporters. Therefore, the sanctioning authorities are directed to dispose of the refund claims expeditiously based on the following clarifications to the issues raised in paragraph 2 above. 3.1 Use of different phrases in rules and notification [para 2(a)] : 3.1.1 The primary objection indicated by the field formations is that the language of Notification No. 5/2006-CX (NT) permits refund only for such services that are used in providing output services. In other words, the view being taken is that to be eligible for refund, input services should be directly used in the output service exported. As regards the extent of nexus between the inputs/input services and the export goods/services, it must be borne in mind that the purpose is to refund the credit that has already been taken. There cannot be different yardsticks for establishing the nexus for taking of credit and for refund of credit. Even if different phrases are used under different rules of CENVAT Credit Rules, they have to be construed in harmonious manner. To elaborate, the definition of input services for manufacturer of goods, as given in Rule 2 (l) (ii) of CENVAT Credit Rules, 2004, i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... after the goods have been removed from the factory. In Budget 2009, the scheme was simplified by making a provision of self-certification [Notification No. 17/2009-ST] where under an exporter or his Chartered Accountant is required to certify the invoices about the co-relation and the nexus between the inputs/input services and the exports. The exporters are also advised to provide a duly certified list of invoices. The departmental officers are only required to make a basic scrutiny of the documents and, if found in order, sanction the refund within one month. The reports from the field show that this has improved the process of grant of refund considerably. It has, therefore, been decided that similar scheme should be followed for refund of CENVAT credit under notification No. 5/2006-CE (NT). The procedure prescribed herein should be followed in all cases including the pending claims with immediate effect. 3.2.2 Procedure : The exporter should, alongwith the refund claim, file a declaration containing the following details: ....... The declaration should be certified by a person authorized by the Board of Directors (in the case of a limited company) or the proprietor/pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y merits in the impugned order denying the refund claim by holding certain credits as inadmissible. 4.9 In respect of the point at (ii) in para 4.3, I find that impugned order is totally silent. Whereas the order in original specifically records as follows: "9.2 It has been alleged in the SCN that the party failed to provide the copies of all relevant FIRCs/BRCs in support of export turnover said to be Rs.72,90,37,061/-. I find that the party has provided copies of 20 FIRCs involving total amount of INR 43,94,36,103/- (approx.) only (as in some FIRCs, remittance is not shown in INR) towards remittance received during the period of refund claim i.e. Jan, 12 to March, 12. As such, I find that the party has failed to produce all the relevant FIRCs/BRCs related to the said export turnover of Rs.72,90,37,061/-, and hence they have not fulfilled the condition of Notfn. No.05/2006-CE (NT) dated 14.03.2006. As such, I am inclined to reject instant refund claim on this ground alone." 4.10 Appellant has submitted in their appeal memo, following calculation to show that the amount claimed as refund by them would remain unaltered even if the export turnover is taken as per the above findin....