Relief to Samsung India: CESTAT allows refund of Cenvat Credit [Read Order]

The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) allowed the refund of Cenvat Credit to Samsung India Ltd. The appellants contested that in terms of Rule 4(7) of the Rules ( CCR 2004 ), a manufacturer or a service provider can avail the credit of input services after payment of the value of taxable service along with the service tax.

The Appellant, M/s Samsung India Electronics Pvt. Ltd is engaged in providing taxable services classifiable as “Management or Business Consultant Services, Consulting Engineer Services, market Research Agency Services, Commercial Training & Coaching Services, Maintenance and Repair Services, Business Support Services, IPR Services other than Copy Right Services, Work Contract Services and Information Technology Software Services.

It is disputing the availment of credit at the stage when the Appellant has filed a refund application under Rule 5 of the Credit Rules. Since the credit has not been denied under Rule 14, therefore the same is available in the books of the Appellant. Thus, the refund of the same is to be allowed under Rule 5 of the CCR, 2004.

The Tribunal refused to agree with the contention of the appellant to the effect that for computing the total turnover, only turnover from the specific premises from where the services have been exported is to be considered. It is contrary to the contention of the appellant that for determining the Net Cenvat Credit, the Credit admissible in respect of the services received at any of the premises should be taken into account. In our view in the case of Centralized registration, the term Total Turn Over in Rule 5 of CENVAT Credit Rules, 2004 refers to the total turnover of the registrant.

Notification No.27/2012-CE (NT) dated 18.06.2012 reproduced earlier at (h) provides that the appellant should have at the time of filing the refund claim, reversed the credit equivalent to the amount claimed as refund. At (i) it is provided that if the refund allowed is less than the credit reversed then the difference between the credit reversed and the refund allowed shall be credited back to the CENVAT account of the appellant. That being so what so whatever amount of refund was sought to be denied the same should have been allowed as a credit in the book of accounts of the Appellant. Revenue authorities could not have denied the credit in the proceedings of refund under Rule 5.

A two-member bench comprising Mr P K Choudhary, Member ( Judicial ) and Mr Sanjiv Srivastava, Member ( Technical ) held that the entire amount that was debited by the appellant at the time of filing this refund claim should be allowed as cash refund to the appellant in terms of the above provisions of CGST Act, 2017.

To Read the full text of the Order CLICK HERE

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