2019 (1) TMI 1429 – CESTAT CHENNAI – TMI – Refund of unutilized CENVAT Credit – export of services – Rule 5 of Cenvat Credit rules, 2004 – rejection of refund on the ground that certain input services such as Event Management service, Clearing & Forwarding Agency service, Insurance service, Real Estate services were not related with the output service – Refund claims were also restricted by excluding the value of exports made by SEZ units while arriving at the proportionate credit – Held that:- The issues in dispute are no longer res integra. The services like Event Management , Clearing & Forwarding Agency service, Insurance service etc. have been held, by various appellate forums, to be very much eligible input services for the purpose of 2(l) of the CCR 2004. So also, it has been consistently held that value of SEZ exports should be included in computing the export turnover for the purpose of working out the quantum of refund in Rule 5 of the CCR 2004.
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Respondent-assessee has
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der Rule 5 of Cenvat Credit rules, 2004 read with Notification No.5/2006-CE (NT) DT. 14.3.2006. The refund claims were partially rejected by the original authority on the ground that certain input services such as Event Management service, Clearing & Forwarding Agency service, Insurance service, Real Estate services were not related with the output service. Refund claims were also restricted by excluding the value of exports made by SEZ units while arriving at the proportionate credit. On appeal, the Commissioner (Appeals) vide impugned orders allowed the appeals on the grounds taht respondent is eligible for input service credit and the same has been availed during the course of said activity and further that export turnover in the formula prescribed under Notification No.5/2006-CE in arriving at proportionate credit will include both STPI and SEZ clearances. Aggrieved, the department have preferred these appeals. 2. Revenue in their grounds of appeal have inter alia, relied upon
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me has been availed by them in the course of their business activity. (ii) The decision of the Bombay High Court in the case of Ultra Tech Cement Ltd. reported in (2010) 20 STR 577 is squarely applicable to the case of the Respondent wherein it has been held that activities relating to business also qualifying as input service. (iii) With respect to that the export turnover in the formula prescribed under Notification No.5/2016 for arriving at the proportionate credit will include both STPI and SEZ clearances. (iv) Further while computing the deductions under proportionate formula both the numerator and denominator should be taken as the same for allowing the deduction. (v) The SEZ export revenue is included under total turnover (denominator) the same should form part of export turnover (numerator) also. (vi) Exports by SEZ same cannot be construed as exempted service. (vii) The refund claim has been preferred under Rule 5 of Cenvat Credit Rules 2004 in accordance with the provision la
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