CESTAT allows Partial Refund of ₹7.83 Lakh CENVAT Credit despite difference in Registered Address appearing in Invoices [Read Order]

In a recent ruling, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) allowed a partial refund of Rs. 7.83 lakh CENVAT credit despite the difference in registered address appearing in invoices.

In this case, the appellant M/s Burns & McDonnel Engineering India Private Limited had approached the CESTAT against the order in appeal passed by the  Commissioner, Central Tax, Central Excise & Service Tax (Appeals), Raigad, Navi Mumbai.

In this case, the appellants have been involved in providing Consulting Engineering Services and Business Support Services ( BSS ) and other services to Burns & McDonnell International Inc. situated out of India. The appellants engage in the following activities: professional engineering services, drawing, designing, and engineering design support.

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The appellants avail CENVAT credit for the Service Tax paid on input services used in providing taxable output services. The appellants were not able to utilize the CENVAT credit taken in their books of account for payment of output service tax liability on exports because they are exporting 100% of their output service.

Thus, the appellants filed their refund application along with supporting documents for refund of unutilized CENVAT credit amounting to Rs.37,81,402  under Rule 5 of the CENVAT Credit Rules, 2004. The appellants have stated that they were unable to use the CENVAT credit they had obtained in order to pay service tax on the output services because they had exported all of their output services, or consulting engineering services,” without payment of Service Tax during the period from January 2017 to March 2017.

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A Show Cause Notice was issued by the department in which the proposal was to reject the claim of refund of Rs 34,97,554/- on various grounds.

The order was passed in which there was a partial rejection of the refund claim of Rs. 8,28,276/- (excluding an amount of Rs.91,777/- rejected on account of input services relating to club and association, employee health insurance premium and out of pocket expenses, out of the total rejected amount of Rs.9,20,053/-).

The appellant who was aggrieved by the above order approached the  Commissioner (Appeals). However, it did not yield satisfactory results. Commissioner (Appeals) passed an order partly allowing the CENVAT credit of Rs.44,796/- by holding them as eligible for taking as input credit of CENVAT.

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The counsel on behalf of the appellant contended that the law does not provide that the CENVAT credit is to be availed/ utilized on the basis of ST-3 Returns.

The CESTAT bench observed that “In the present case, the CENVAT credit has been taken by the same assessee-appellant and therefore the ground of difference in the address/registered address appearing in the invoices, on which the impugned order had rejected the CENVAT credit is not proper and justified.”

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The CESTAT bench comprising of M.M. Parthiban did not find any merit in the appeal and modified the impugned order to the extent of allowing the appeal filed by the appellants in respect of refund of Rs.7,83,480/-being found as eligible CENVAT credit.

To Read the full text of the Order CLICK HERE

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