Warburg Pincus India Pvt. Ltd. Vs Asstt. Commissioner (CESTAT Mumbai)
CESTAT Mumbai held that non-reflection of Cenvat Credit in ST-3 return cannot be ground to deny refund of unutilized cenvat credit.
Facts- The appellant providing “Banking and other financial services”. They filed two refund claim of RS. 14,44,091/- for the period April 2005 to Dec. 2005 and Rs. 38,44,130/-for the period from January 2006 to September 2006 with the erstwhile Service Tax Commissionerate on the ground that they were not in a position to utilize the cenvat credit of the duty service Tax taken on input services used in providing output services exported without payment of service tax. Both the claims were rejected vide two O-I-Os dated 03.04.2007 and 06.08.2007. Aggrieved appellant filed the appeal to Commissioner (Appeal) which were rejected by order in appeal dated 06.05.2010.
Aggrieved appellant has filed this appeal.
Conclusion- I hold that on the ground that the appellant has not shown Cenvat credit in their ST-3 returns, cannot be the ground to deny refund to the appellant.
In Serco Global Services Pvt Ltd [2015 (39) STR 892 (Tri. Del.)], it is held that the refund is to be granted based on the Cenvat credit available in the Cenvat Credit Account and not on the basis of the closing balance of Cenvat credit shown in ST-3 Return. Further, the appellant submitted a revised return showing a correct closing balance of Cenvat credit but the same was ignored by the Adjudicating Authority.
FULL TEXT OF THE CESTAT MUMBAI ORDER
This appeal is directed against the order in appeal no NA/CGST/A-I/MUM/ 179/2019-20 dated 26.09.2019 of the Commissioner (Appeals), GST and Central Excise, Mumbai-I. By the impugned order Commissioner (Appeals) has held as follows:
“ORDER
5.1. In view of the above discussion and finding, I modify the Order-in-Original No. CGST Mum-South/Refunds/RKS/61 – 62/2018-19 dated 15.11.2018, passed by Asstt. Commissioner (Refunds), CGST, Mumbai South, as under:
(i) I hold that out of rejected refund claim of Rs. 40,19,282/- the appellant is eligible for refund claim of Rs. 16,16,022/- and the OIO is set aside to the said extent.
(ii) Denial of Refund to the extent of Rs. 24,03,260/- is upheld.
5.2 Appeal No. V2(A-I)/136/CGST/MS/ 2018-19 is disposed of in the said terms.”
2.1 The appellant providing “Banking and other financial services”. They filed two refund claim of RS. 14,44,091/- for the period April 2005 to Dec. 2005 and Rs. 38,44,130/-for the period from January 2006 to September 2006 with the erstwhile Service Tax Commissionerate on the ground that they were not in a position to utilize the cenvat credit of the duty service Tax taken on input services used in providing output services exported without payment of service tax. Both the claims were rejected vide two O-I-Os dated 03.04.2007 and 06.08.2007. Aggrieved appellant filed the appeal to Commissioner (Appeal) which were rejected by order in appeal dated 06.05.2010
2.2 Against O-I-A dated 06.05.2010 preferred an appeal in the CESTAT, West Zonal Bench, Mumbai. The Hon’ble CESTAT, West Zonal Bench Mumbai vide order A/1401/15/STB dt. 13.05.2015 remanded the matter to original authority observing as follows:
> Claimant was eligible to avail the Cenvat credit of the input services for the period prior to 14.03.2006 and being eligible to claim refund of the unutilized Cenvat Credit, the claimant cannot be denied the same and set aside the impugned to this extent.
> Claimant’s counsel had shown willingness to produce all the documents before the lower authorities, the matter was remanded back to the adjudicating authority for the limited purpose of quantification of the correct amount of refund to be paid based on the documents which may be submitted by the claimant.
2.3 In the remand proceeding the original authority vide the Order in Original dated 15.11.2018 sanctioned refund of Rs. 12,68,939/- and disallowed the refund of Rs. 40,19,282/- stating as follows:
i. At the time of filing the return for the period April 2006 to Sept. 2006, the claimant has not shown any opening balance of Cenvat Credit or Education Cess in the month of April 2006, thus implying that the claimant did not have any unutilized Cenvat Credit lying in their account by the end of March 2006. Thus the claimant’s refund claim (of the unutilized Cenvat Credit) for the period from April 2005 to March 2006 total amounting to RS. 23,83,160/-(Rs. 14,44,091/- for April 2005 to December 2005 and Rs. 9,39,069/- for January 2006 to March 2006) is liable for rejection.
ii. The claimant has availed cenvat on input services of rent a cab, maintenance & Repair, cleaning services, mandap keeper services, internet charges & Dry cleaning services in respect of hotels, erection / commission and installation charges, catering services, telephone services, insurance services, manpower recruitment services, etc. These services have no nexus with the output services. Further in some cases the invoice is not in appellant’s name, invoice is not submitted and excess credit is claimed. Therefore Cenvat credit of Rs. 16,36,122/- is disallowed.
2.4 Aggrieved appellant, filed appeal to Commissioner (Appeal) which has been disposed of as per the impugned order referred in para 1, above.
2.5 Aggrieved appellant has filed this appeal.
3.1 I have heard Shri Vinay Jain, Advocate for the appellant and Shri B P Sinha, Superintendent, Authorized Representative for the revenue.
3.2 Arguing for the appellant learned counsel submits as follows:
> Disallowance of Cenvat Credit refund on the ground that credit is not reflected in the ST-3 return is unsustainable. In view of the decisions in case of
