The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has confirmed that registration under “Information Technology Software Service” is not a mandatory requirement for claiming a refund of CENVAT credit under Notification No. 27/2012-C.E. (N.T.) if exports made undisputedly.
Syx Automations India Private Limited, the appellant, is a company registered under “Information Technology Software Service” with effect from 12-12-2014. The appellant filed a refund claim for Rs. 6,50,808 on 27-05-2015 under Notification No. 12/2012-NT for July to September 2014, before obtaining registration.
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The department issued query memos on 17-07-2015 and 03-11-2015, to which the appellant responded on 19-07-2015 and 07-12-2015, respectively. The refund was initially sanctioned under an Order dated 29-01-2016 but a review order dated 08-04-2016 under Section 84 of the Finance Act, 1994, reversed the sanction. Following that the appellant received a demand show cause notice.
On appeal, the Commissioner of Central Excise (Appeals) ruled that registration was a prerequisite for claiming refunds and dismissed the appeal. The appellant challenged the order before CESTAT.
The appellant’s counsel relied on the Karnataka High Court ruling in Tavant Technologies India Pvt. Ltd. and Portal India Wireless Solutions Pvt. Ltd., which held that refunds cannot be denied for unregistered periods unless explicitly mandated by law.
The appellant’s counsel argued that Notification No. 27/2012 did not require registration as a condition for refunds and that beneficial notifications should not be restricted by imposing conditions absent in the parent legislation.
The revenue counsel countered that refund claims must align with conditions under the parent legislation and CENVAT Credit Rules.
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The two-member bench comprising Member ( Judicial ) Somesh Arora observed that the notification’s conditions were satisfied and no conflict existed with the parent legislation. The tribunal referenced Kapu Gems vs. C.C.E & S.T.-Surat-I, which ruled that refunds cannot be denied for non-registration if exports were undisputedly made.
The tribunal observed that procedural conditions in refund notifications should not override substantive rights granted by law. The tribunal set aside the Commissioner (Appeals) order and remanded the matter to the adjudicating authority for document verification and reprocessing the refund within two months. The appeal was allowed.
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