2018 (6) TMI 814 – CESTAT HYDERABAD – TMI – Refund of CENVAT credit – export of services – rejection on the ground that they had not debited the CENVAT credit amount from their books of accounts at the time of making the claim as required – It is further alleged that the refund claim amount was not reflected in the Service Tax returns filed by the appellant during the relevant period and the general ledger of the assesse to show that the duty has been debited cannot be considered as evidence, it being a private record.
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Held that:- It is clear that N/N. 05/2006 – CE (NT) lays down that the amount claimed as refund of CENVAT amount should be debited before applying for the Refund and the appellant had not done so. They have debited the amount, but much later and thereby they violated the condition 2(h) of the notification. The Adjudicating Authority had, therefore, rejected the refund and the First Appellate Authority has upheld the Order-in- Original and rejected the appeal – It
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f their turnover is export of services and hence they accumulated CENVAT credit. They had filed an application under Rule 5 of CENVAT Credit Rules, 2004 to claim refund of CENVAT credit in proportion to their export services. These claims were rejected by the Adjudicating Authority on the ground that they had not debited the CENVAT credit amount from their books of accounts at the time of making the claim as required. It is further alleged that the refund claim amount was not reflected in the Service Tax returns filed by the appellant during the relevant period and the general ledger of the assesse to show that the duty has been debited cannot be considered as evidence, it being a private record. 4. Aggrieved, the appellant appealed to the Commissioner (Appeals) who dismissed the appeals and upheld the orders of the Original Authority. The present appeal is against the orders of the Commissioner (Appeals). 5. Learned Chartered Accountant appeared on behalf of the appellant and explaine
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7/- 10,32,532/- 5,39,822/- CENVAT reversed in revised ST-3 for the period April 16 to Sept 16 Refer Page 49 Table I 3 Refer Page 49 Table I 3 Reduced Opening CENVAT credit Refer Page 35 (rear side) Table I 3 15. Appeal Order Date 04/12/2017 04/12/2017 11/12/2017 It is his submission that the appellant was under mistaken belief that the debit in their books of accounts had to be done after one year from the end of the quarter for which the refund claim is filed and they have done so. The refund claim, however, was filed before the end of one year. He further said that the appellant had mistakenly not entered these details in ST-3 returns but had subsequently filed revised the returns rectifying the defects. It is his further submission that the appellant is largely an exporter with a very small turnover in the domestic sector and hence always had accumulated CENVAT credit. It is his submission that due to ignorance, the appellant had not claimed refund of service tax during the previous
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Authority and the First Appellate Authority they have not taken back the credit CENVAT in their accounts. He relied upon the following judgments and orders. i) Commissioner of Service Tax, Delhi Vs. Covergys India (P.) Ltd., [2009 (21) STT 67 (NEW DELHI -CESTAT)] ii) Kothari Infotech Ltd., Vs. Commissioner of Central Excise, Surat [2013 (38)taxmann.com 298 (Ahmedabad – CESTAT)] iii) Manubhai & Co. Vs. Commissioner of Service Tax, Ahmedabad [2011 (21) STR 65 (Ahmedabad – CESTAT)] iv) Wipro Ltd., Vs. Union of India [2013 (32) taxmann.com 113 (Delhi)] v) Commissioner of Central Excise-I Vs. SG Analytics (P.) Ltd., [2016 (72) taxmann.com 180 (Mumbai – CESTAT)] vi) Indago Vs. Commissioner of Service Tax, Pune [2016 (69) taxmann.com 199 (Mumbai – CESTAT)] vii) Principal Commissioner of Service Tax, Pune Vs. Prodair Air Products India (P.) Ltd., [2016 (71) taxmann.com 358 (Mumbai – CESTAT)] 6. The Learned Departmental Representative on the other hand, vehemently opposed the appeal and sai
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d before the Parliament and is scrutinised by the Parliamentary Committee on Subordinate Legislation and where, it feels, necessary, modified. Thus, it is clear that: a) The legislation is the exclusive privilege of the Legislature; b) When the legislature delegates powers to make Rules, Regulations, issue notifications, etc., such delegation is done to the Government which is answerable to the Legislature any and c) All delegated legislations are, through a well laid down process, placed before the legislature and scrutinised by it and where it feels necessary, amended as per its directions. 8. Of course, High Courts and Supreme Court who have the mandate to interpret the Constitution, review the legislation for its constitutionality, etc., which is another additional check on the legislation. However, neither the officers enforcing the law nor the quasi-judicial authorities including the Tribunals (which are creations of the law) have the power to modify, amend, insert, delete, stret
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to that effect. We shall assume for the purposes of this appeal that it is so, notwithstanding the fact that the said question is now pending before a larger Constitution Bench of nine Judges along with the issue relating to unjust enrichment. Yet the question is whether it is permissible for the High Court to direct the authorities under the Act to act contrary to the aforesaid statutory provision. We do not think it is, even while acting under Article 226 of the Constitution. The power conferred by Article 226/227 is designed to effectuate the law, to enforce the Rule of law and to ensure that the several authorities and organs of the State act in accordance with law. It cannot be invoked for directing the authorities to act contrary to law. In particular, the Customs authorities, who are the creatures of the Customs Act, cannot be directed to ignore or act contrary to Section 27, whether before or after amendment. May be the High Court or a Civil Court is not bound by the said provi
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tion No.05/2006 – CE (NT) prescribing the conditions, limitations and safeguards read as follows: Rule 5 of CENVAT Credit Rules and Notification No. 5/2006 -C.E. (N.T.) [5. Refund of CENVAT Credit. – (1) A manufacturer who clears a final product or an intermediate product for export without payment of duty under bond or letter of undertaking, or a service provider who provides an output service which is exported without payment of service tax, shall be allowed refund of CENVAT credit as determined by the following formula subject to procedure, safeguards, conditions and limitations, as may be specified by the Board by notification in the Official Gazette: Refund amount = (Export turnover of goods+ Export turnover of services) x Net CENVAT credit/Total turnover Where,- (A) "Refund amount" means the maximum refund that is admissible; (B) "Net CENVAT credit" means total CENVAT credit availed on inputs and input services by the manufacturer or the output service provide
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xported; (b) export turnover of services determined in terms of clause (D) of sub-rule (1) above and the value of all other services, during the relevant period; and (c) all inputs removed as such under sub-rule (5) of rule 3 against an invoice, during the period for which the claim is filed. (2) This rule shall apply to exports made on or after the 1st April, 2012: Provided that the refund may be claimed under this rule, as existing, prior to the commencement of the CENVAT Credit (Third Amendment) Rules, 2012, within a period of one year from such commencement: Provided further that no refund of credit shall be allowed if the manufacturer or provider of output service avails of drawback allowed under the Customs and Central Excise Duties and Service Tax Drawback Rules, 1995, or claims rebate of duty under the Central Excise Rules, 2002, in respect of such duty; or claims rebate of service tax under the Export of Services Rules, 2005 in respect of such tax. Explanation 1.- For the purp
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dit shall be allowed subject to the procedure, safeguards, conditions and limitations as specified below, namely:-. 2.0 Safeguards, conditions and limitations.- Refund of CENVAT Credit under rule 5 of the said rules, shall be subjected to the following safeguards, conditions and limitations, namely:- (a) the manufacturer or provider of output service shall submit not more than one claim of refund under this rule for every quarter: provided that a person exporting goods and service simultaneously, may submit two refund claims one in respect of goods exported and other in respect of the export of services every quarter. (b) in this notification quarter means a period of three consecutive months with the first quarter beginning from 1st April of every year, second quarter from 1st July, third quarter from 1st October and fourth quarter from 1st January of every year. (c) the value of goods cleared for export during the quarter shall be the sum total of all the goods cleared by the exporte
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imant from his CENVAT credit account at the time of making the claim. (i) In case the amount of refund sanctioned is less than the amount of refund claimed, then the claimant may take back the credit of the difference between the amount claimed and amount sanctioned. 3.0 Procedure for filing the refund claim. – (a) The manufacturer or provider of output service, as the case may be, shall submit an application in Form A annexed to the notification, to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, in whose jurisdiction,- (i) the factory from which the final products are exported is situated. (ii) the registered premises of the provider of service from which output services are exported is situated. (b) The application in the Form A along with the documents specified therein and enclosures relating to the quarter for which refund is being claimed shall be filed by the claimant, before the expiry of the period specified in sectio
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m is incorrect or insufficient and further enquiry needs to be caused before the sanction of refund claim. (g) At the time of sanctioning the refund claim the Assistant Commissioner or Deputy Commissioner shall satisfy himself or herself in respect of the correctness of the claim and the fact that goods cleared for export or services provided have actually been exported and allow the claim of exporter of goods or services in full or part as the case may be. It is clear that, notification lays down that the amount claimed as refund of CENVAT amount should be debited before applying for the Refund and the appellant had not done so. They have debited the amount, but much later and thereby they violated the condition 2(h) of the notification. The Adjudicating Authority had, therefore, rejected the refund and the First Appellate Authority has upheld the Order-in- Original and rejected the appeal. I have considered the argument of the Learned Chartered Accountant of the appellant that it was
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