Accumulated Cenvat Credit Lying Unutilized Does Not Carry Any Interest: CESTAT
Mariya Paliwala
2 Jun 2023 2:18 PM IST
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that accumulated CENVAT credit lying unutilized does not carry any interest.The two-member bench of P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) has observed that Rule 5 of the CENVAT Credit Rules, 2004 clearly lays down that the assessee is free to take back the credit of...
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that accumulated CENVAT credit lying unutilized does not carry any interest.
The two-member bench of P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) has observed that Rule 5 of the CENVAT Credit Rules, 2004 clearly lays down that the assessee is free to take back the credit of not sanctioned or partially sanctioned refunds. As such, payment of interest is not provided.
The appellant and assessee, who were registered under Service Tax, are providing services under the categories of ‘advertising agency service’ and ‘business auxiliary service’. The appellants have been exporting the services to various clients located outside India and, as a result, have been claiming refunds of unutilized input service tax credits under Rule 5 of the CENVAT Credit Rules, 2004.
The appellant has requested a refund of interest where the refund claims filed under Rule 5 of the CENVAT Credit Rules, 2004 were rejected by the original refund sanctioning authority in terms of the provisions of Section 11BB of the Central Excise Act, 1944.
The tribunal noted that if the export is not complete, the exporter of services is not entitled to claim a refund under Rule 5 of the CENVAT Credit Rules, 2004. Therefore, harmoniously reading the Export of Service Rules and Section 11B of the Central Excise Act, 1944, in the case of export of services, the relevant date must be the date of realization of foreign exchange.
The CESTAT held that the procedure prescribes debiting the CENVAT Credit account before filing the refund claim, and it also provides for taking back the credit into their CENVAT Credit account of the amount not considered for sanction or where the refund claims are partially sanctioned.
Case Title: M/s. Ad2Pro Global Creative Solutions Pvt. Ltd. Versus The Commissioner of Service Tax
Case No.: Service Tax Appeal Nos. 40918 and 40919 of 2016
Date: 30.05.2023
Counsel For Appellant: Shrayashree T.
Counsel For Respondent: Sridevi Taritla
