No Denial of Refund of Cenvat Credit for the reasons of a premises being Unregistered: CESTAT [Read Order]

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The Customs Excise and Service Tax Appellate Tribunal (CESTAT), Chennai held that the refund of input Cenvat credit cannot be denied for the reasons of premises being unregistered.

The assessee-appellant(M/s. MSYS Tech India Private Limited)  is challenging the denial of refund of unutilized input Cenvat Credit under Rule 5 of the Cenvat Credit Rules, 2004. The appellant, a provider of ‘Information Technology Services’ to its foreign clients, filed a refund claim of service tax paid on input services, of an amount of Rs. 8,07,955/- for the period of April 2017 to June 2017.

 A Show Cause Notice was issued proposing to restrict the refund claim to Rs. 1,36,458/- on the allegations that the appellant had claimed certain ineligible input Cenvat credit. The adjudicating authority after considering the explanation filed by the assessee.

Firstly considered certain services as ineligible since those services were rendered at an unregistered premises, then re-determined the export turnover and total turnover but finally, proceeded to reject the entire refund claim of the assessee, on the ground that the amount claimed as refund was not debited from the appellant’s Cenvat Credit Account at the time of filing the claim.

The appellant having failed in its endeavor to convince the First Appellate Authority, has filed the present appeal before this forum.

In the light of the judgment in Commissioner of GST & Central Excise, Chennai Vs. BNP Paribas Sundaram Global Securities, in CMA No. 57 of 2018 the bench came into the conclusion that denial of refund for the reasons of premises being unregistered cannot sustain.

Judicial Member, P. Dinesha observed that the availability of input credit as regards the services rendered at un-registered premises, is fairly settled and even the  High Court of Judicature at Madras has held that the refund of input Cenvat credit cannot be denied just because premises was unregistered,

The Tribunal further observed that there is also no denial by the Revenue as to the claim of the appellant that subsequent to the filing of TRAN-1 Return, the refund amount was debited in its GSTR-3B/Electronic Credit Ledger.

While setting aside the appeal the tribunal also said that the introduction of GST there was a change in the scenario, there was also no provision in the ACES system to debit the refund amount and that subsequent reversal by the appellant in its GSTR-3B file is a sufficient compliance with condition and it has been clarified by CBIC.

To Read the full text of the Order CLICK HERE