The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed to avail un-utilized Cenvat credit on export of input services.
The appellant availed Cenvat Credit of service tax paid on various taxable services. Since, the output services were entirely exported by the appellant during the disputed period, there was no scope or occasion on the part of the appellant to utilize the CENVAT credit for payment of service tax. Therefore, in terms of Rule 5 of Cenvat Credit Rules, 2004, the appellant had filed various refund applications before the original authority, claiming refund of service tax paid on the input services for different periods.
The appellant has assailed the impugned order on the ground that the authorities below cannot question the manner of availment of Cenvat credit. It is further contended that since availment of credit is the statutory right of assessee, the benefit of such availment of credit in case of exportation of goods or services cannot be whittled down on the ground that availment of credit is not in conformity with the statute.
A Two-Member Bench comprising (S.K. Mohanty, Member (Judicial) and M.M. Parthiban, Member (Technical) observed that “Insofar as claim of refund under Rule 5 of CCR is concerned, the department has to only verify whether the requirement of the said rule read with the notification issued thereunder have been fulfilled or not.”
“Rule 5 refund is permissible in case of observance of the formula laid down therein, which the appellant in this case has complied with. Since, the output services were exported by the appellant, the un-utilized Cenvat credit availed on the input services, in our considered opinion, should be available to the appellant” the Tribunal noted.
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