Refund cannot be rejected on ground that input services are not eligible for Cenvat credit

Customs, Excise & Service Tax Appellate Tribunal (CESTAT) pronounced that rejection of refund of Cenvat credit partly on the ground that the input services are not eligible for Cenvat credit at all is not correct in law.

The appellant has filed the refund claim in terms of Rule 5 of the CENVAT Credit Rules, 2004. The said refund claim was modified by the Assistant Commissioner disallowing the CENVAT credit of Rs 4,53,533/- (Rupees Four Lakhs Fifty Three Thousand Five Hundred and Thirty Three Only).

The Appellant Argued that without denying the CENVAT Credit taken/ availed by the appellant in their book of accounts during the relevant period (quarter) by way of initiating proceedings against the appellant in terms of Rule 14, revenue could not have altered the quantum of “Net CENVAT Credit” availed during the said quarter, and deny the encashment of that amount of the CENVAT Credit which is due as per the Rule 5.

Sanjiv Srivastava Member (Technical) allowed the appeal filed by Appellant and the Order disallowing was set aside.

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