By TIOL News Service

CHENNAI, APRIL 27, 2017: THIS is a Revenue appeal against the judgment and order dated 05.07.2016 passed by the CESTAT.

The Tribunal came to the conclusion that in the absence of a statutory provision, prescribing that, registration of the premises was mandatory for availing input service tax credit, the Assessee could not be denied refund of unutilized CENVAT credit on input services.

After extracting the notification 5/2006-CE(NT), the High Court observed –

++ A bare perusal of the clause would show that insofar as the provider of output services is concerned, for making an application for refund of CENVAT Credit, he is required to file an application in the prescribed form, i.e., Form A, which is annexed to the notification, and the said application is required to be made to the Deputy Commissioner of Central Excise, or, the Assistant Commissioner of Central Excise, as the case may be. Furthermore, the application is required to be accompanied with a copy of the relevant invoices and a certificate from the bank, indicating therein, the realization of export proceeds.

++ Apart from the aforesaid, there is no limitation. Clearly, the notification does not prohibit the grant of CENVAT credit, even, if, the premises are not registered.

++ Restriction, if any, is provided in clause 5 of the said notification, which states that refund of unutilised input credit will be restricted to the extent of the ratio of export turnover to the total turnover for the given period, to which, the claim relates.

++ What is relevant to note is that Rule 5 of the 2004 Rules does not stipulate registration of premises as a necessary prerequisite for claiming a refund.

++ Insofar as the Assessee in this case is concerned, it had obtained registration of its premises way back on 23.01.2009. The record shows that allegation of non-registration of premises relates to another building, which was taken on lease by the Assessee and is located in Alwarpet, Chennai. Concededly, services were exported to a overseas Company, from this building which was not registered.

++ Rule 4 of the 1994 Rules, inter alia, provides that in case where a person is liable for paying service tax on a taxable services, who provides for such services from more than one premises, he may at his option register one or more premises or offices from where centralized billing or accounting is done. Once, the Assessee conveys his option to the concerned Authority, registration under Rule 4(2) of the 1994 Rules is granted by the Commissioner of Central Excise, within whose jurisdiction, such premises or offices are located.

++ A perusal of the Sub Rules(2) and (3)of Rule 4 of the 1994 Rules, on which, reliance is placed by the learned counsel for the Revenue, does not bring to fore any limitation, with regard to grant of refund, for unutilized cenvat credit, qua, export services, merely on the ground that the premises are not registered.

++ As a matter of fact, in this particular case, only the "additional building, which was taken on lease and was located at Alwarpet, Chennai", was not registered.

Noting that the view articulated above, is also taken by the Karnataka High Court in mPortal India Wireless Solutions (P) Ltd. - 2011-TIOL-928-HC-KAR-ST and in Tavant Technologies India Pvt. Ltd. - 2016-TIOL-441-HC-KAR-ST & Atrenta India Pvt. Ltd. - 2016-TIOL-2741-HC-ALL-ST , the Revenue appeal was dismissed.

(See 2017-TIOL-798-HC-MAD-ST)