We are sharing with you the recent judicial pronouncement of the Hon’ble Bangalore CESTAT in the case of Apotex Research Pvt. Ltd. & Others Vs. CC, Bangalore-Cus & Others [2014-TIOL-1836-CESTAT-Bang] wherein 56 Appeals were heard together and the Bangalore Bench of the CESTAT passed an interim order on 16 Common/ Legal Issues pertaining to refund of Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004 (the Credit Rules) for exporters, as mentioned hereunder:

Sl. No. Issue Decision
 1. Whether Refund under Rule 5 of the Credit Rules would be admissible when there was no notification issued prescribing safeguards, conditions and limitations to be fulfilled? Wherever the refund has been rejected on the ground of words used in the notification, it will have to be remanded to the original adjudicating authority for reconsideration of the eligibility of credit.
 2. In the case of refund under Rule 5 of the Credit Rules, place of removal which has been a subject matter of dispute in several cases.   Place of removal shall be taken as port/airport/land customs station and all the services utilized up to the stage would become eligible for refund under Rule 5.
 3 Whether Cenvat credit can be refunded under Rule 5 when there was no Notification prior to 14.03.2006? Yes, the Cenvat credit can be refunded even when there was no Notification prior to 14.3.2006.
 . Stand taken by the Revenue that in respect of 100% EOUs, the Cenvat credit cannot be taken at all since the finished goods are exempt tenable Post 10.09.2004, Cenvat credit cannot be denied on the ground that unit availing the credit is a 100% EOU. And so refund has to be given.
 4. The activity of provision of service is in India and therefore the claim for refund on the ground that service has been exported cannot be accepted The Central Board of Excise & Customs (“the CBEC”) has issued a clarification vide Circular No. 111/5/2009-ST dated 24.02.2009. In this Circular, in paragraph-3,   the CBEC has accepted that for category (iii) services (As per Export of Services Rules, 2005), it is possible that export of service may take place even when all the relevant activities take place in India so long as benefits of these services accrue outside India.
5. Nexus between the input services and the output services It is nobody’s case that there is no need to establish the relation between the input services and the business of manufacture.
 6. Foreign Inward Remittance Certificate In certain cases, the lower authorities have taken a view that production of foreign inward remittance certificate by the claimant to claim refund is not sufficient. A certificate from the bank certifying that the amount in the invoice has been received specifically with reference to the invoice has to be made available. What is required to be established by an exporter is that in respect of Invoices raised by him, consideration in foreign currency has been received.
 7. Can clearance to a 100% EOU be considered as export? Yes, clearance to a 100% EOU has to be considered as export.
 8. Proof of payment of service tax Proof of payment of service tax is not required to be asked for from the claimant while determination of refund claims.
 9. Defective documents Rejection of the claim for refund of Cenvat credit on the ground that it is not admissible when the unit was not registered cannot be upheld.
 10. Condonation of omissions in documents as per the provisions of Rule 9 of the Credit Rules Rule 9(2) of the Credit Rules provides that if the document does not contain all the particulars but contains details of duty or service tax payable, description of goods, etc. Cenvat credit may be allowed.
 11. Rejection of refund claim on the ground that output service is not taxable Decisions in cases where credit has been denied or refund has been denied on the ground that export is not made under Bond or Letter of Undertaking cannot be sustained.
 12. Cenvat credit without registration Provisions of Rule 3 of the Credit Rules show that credit can be taken by a manufacturer or a provider of output service and there is no requirement of registration under Rule 3 of the Credit Rules at all.
 13. Taxability of output and admissibility of Cenvat credit The admissibility of Cenvat credit is not relevant for the purpose of determining whether refund is admissible under Rule 5 of the Credit Rules or not.
 14. Relevant date for filing refund claim Provisions of Section 11B of the Central Excise Act, 1944 for the purpose of limitation would be applicable.
 15. Method for calculation of relevant date The relevant date should be the date on which the consideration has been received where the claimant is service provider and consideration paid where the claimant is service receiver.

Based on these judgments, individual cases will be considered as part heard regarding major issues concerning refund of Cenvat credit to exporters.

(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)

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October 2020