By TIOL News Service

MUMBAI, NOV 01, 2016: THE issues involved in this appeal are-

+ Refund of CENVAT credit that remains unutilized in the CENVAT account due to non-submission of certificate of receipt of the payment in convertible foreign currency.Inasmuch as the refund was rejected as the appellant had not received the amounts towards export of the software in foreign currency but in Indian rupees.

+ Whether services like service tax paid on insurance services and on food vouchers (meal coupons) are eligible for availing CENVAT credit or otherwise.

The Bench observed-

++ When there is no dispute as to the exports of the services rendered by the appellant and no dispute as to the availment of the CENVAT credit or eligibility thereof, the only reason for denying CENVAT credit that the amounts are not received in convertible foreign currency seems to be irrational way of denying the legitimate refund to an assessee. [PMI Organization Centre Pvt. Ltd. - 2015-TIOL-2570-CESTAT-MUM, AGM India Advisors Pvt. Ltd. - 2015-TIOL-2775-CESTAT-MUM & Sun-Areas Real Estate Pvt. Ltd. - 2015-TIOL-956-CESTAT-MUM - Tribunal has taken a view that certificates produced for foreign inward remittances, though in Indian rupees, CENVAT credit cannot be denied.]

++ Lower authorities have denied the refund only on the ground that the said insurance also covers the dependents of the employees who are insured. In their own case, the Mumbai Tribunal - 2016-TIOL-1851-CESTAT-MUM held that such CENVAT credit cannot be denied and refund has to be sanctioned.

++ As regards the service tax credit of the service tax paid on the meal coupons, the Mumbai Tribunal in the case of Affinity Express India Pvt. Ltd. - 2015-TIOL-2441-CESTAT-MUM has held that such credit is available and refund needs to be sanctioned if the services are exported.

Holding that the impugned orders are unsustainable, the same were set aside and the appeals were allowed.

(See 2016-TIOL-2828-CESTAT-MUM)