Cenvat Credit Available on Books of Account Can Be Rejected only with Due Procedure: CESTAT [Read Order]

The Mumbai Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Cenvat Credit available on books of account can be rejected only with due procedure.

M/s Saavn Media Private Limited, the appellant is engaged in the export of service and they availed CENVAT Credit of Service Tax paid on the input Services. The appellant filed two separate refund applications for refund of unutilized accumulated CENVAT Credit under the provisions of Notification No. 27/2012-CE dated 18.06.2012 issued under Rule 5 of CENVAT Credit Rules, 2004.

Certain amounts were allowed and certain amounts were rejected. Against the refunds rejected, appellants preferred two separate appeals before the Commissioner (Appeals).

 The Commissioner (Appeals) allowed some relief but also did not allow a refund of Rs. 5,97,465/- out of one claim and did not allow a refund of Rs. 6,17,759/- in respect of the other claim and therefore, the appellant has preferred above appeals in respect of the rejected portion of the two refund claims.

It was submitted that one is CENVAT Credit of Service Tax paid on Event Management Service and the other one is Service Tax paid on Renting of Immovable Property. He further submitted that there was no issue of show cause notice for the rejection of the refund.

It was settled law that unless CENVAT Credit availed by the appellant has not been recovered by way of issue of show cause notice invoking Rule 14 of CENVAT Credit Rules, 2004, the CENVAT Credit available on the books of account cannot be rejected when it is accumulated on account of export of Service.

A Single member bench comprising Anil G Shakkarwar, Member (Technical) found that CENVAT Credit was not disallowed by way of invoking Rule 14 of CENVAT Credit Rules, 2004 and further held that since the CENVAT Credit is available on the accounts of the appellant, the refund of the same could not be rejected.

The Tribunal set aside the impugned order to the extent of rejection of refund of CENVAT Credit respectively to the tune of Rs. 5,97,465/- and Rs. 6,17,759/- and directed the original authority to allow the refund of the same. 

To Read the full text of the Order CLICK HERE

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