TaxTMI 
TaxTMI 
2025 (6) TMI 1092
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.... one Lakh Seventy three Thousand Six Hundred Seventy three only), 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 u....
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....nd of credit pertaining to un-registered premises or on the ground of nexus, is unwarranted. They have rightly claimed all the credit in accordance 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....
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....ed and rejected vide the impugned Order by the adjudicating authority. Considering the amount involved beyond the impugned Order is not in the purview of this appeal, accordingly, the same is not discussed or being taken up by me in this Order. 8. I find that the adjudicating authority has rejected the refund claim of service tax mainly on the 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 und....
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.... upon the manufacturer or provider of output service taking such credit" 11. Thus, the Rule clearly provides that the burden to prove regarding the admissibility of the CENVAT credit is upon the service provider who takes the credit. In the present case, the onus of admissibility of CENVAT credit taken on the impugned services is upon the Appellant by virtue of Rule 9(5) ibid. However, no material evidences have been placed on record by the Appellant 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 aut....
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....it, subject to compliance of the procedures/guidelines laid down under the notifications issued thereunder. We find that the refund benefit was denied to the assessee-Appellant on the sole ground that there was no nexus between the input services and the output service exported by the Appellant. Further, in Revenue's appeal, it has been contended that certain disputed services are not conforming to the definition of input service provided under Rule 2(l) ibid. Insofar as taking of irregular Cenvat credit is concerned, 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 no....
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.... the refund of Cenvat credit as claimed by the Appellant under Rule 5 ibid cannot be denied to them and the same is admissible." 4.6 In case of Credit Suisse Business Analytics India Pvt. Ltd. [(2023) 9 Centax 248 (Tri.-Bom] the above referred decisions were followed after noting as follows: "6. Therefore it is settled legal position that in absence of any notice for recovery as provided by Rule 14 ibid the refund claimed by the assessee under Rule 5 cannot be denied. The decision of the Tribunal in the matter of Qualcomm India 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 su....
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....f the past period can also be refunded; and (e) In certain cases, the invoices accompanying the refund claim are incomplete in as much as either the description ofservice or its classification is not mentioned. In some cases, even the name of the receiver of the inputs/input services is alsonot mentioned. 3. The matter has been examined. At the outset it is necessary to understand that the entire purpose of Notification No. 5/2006-CX (NT) is to refund the accumulated input credit to exporters and zero-rate the exports. Accumulated credit and delayed sanction of refund causes 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....
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....tems (that is, services which can be called as recreational or used for beautification of premises), rest houses etc. prima facie would not appear to impact the efficiency in providing the output services, unless adequate justification is shown regarding their need. 3.2 One-to-one co-relation between inputs and outputs and scrutiny of voluminous record [para 2(b) & (c) above] : 3.2.1 Similar problem of co-relation and scrutiny of large number of documents was being faced in another scheme[Notification No. 41/2007-ST dated 06.10.2007] which grants refund of service tax paid on services used by an exporter 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. Th....
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....service/goods exported as discussed earlier. In any case, the suggested Chartered Accountant's certificate should clearly bring out the nature of the service and this will assist the officer in taking a decision." 4.8 Admittedly in the present case I am not in position to ascertain whether any proceedings for denial of the CENVAT Credit were initiated in terms of the Rule 14 of the CENVAT Credit Rules, 2004. Nothing to this effect has been stated either in the show cause notice, order in original or the impugned order. Thus in absence of any assertion that proper proceedings have been initiated under Rule 14, in view of the above decisions I do not find any 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....