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Refund of unutilised CENVAT credit — Whether the appellant is eligible for the refund of claim of the CENVAT credit accumulated despite the nonregistration of appellant’s head office as a service tax distributor and non-distribution of service tax credit as per the laid down procedures — Rule 5 and Rule 7 of the CENVAT Credit Rules, 2004.
Facts:
The appellants claimed refund of unutilised credit of Rs.77,150 for the invoices in the name of the head office which was not registered as service tax distributor. The Adjudicating Authority vide order-in-original rejected the refund claim on the ground that in the absence of registration, head office could not distribute the CENVAT credit to the appellant which was an EOU. The appellants contended that the non-observance of procedure of distribution of credit will not come in the way of the refund of the amount of the credit.
Held:
The Tribunal observed that the appellants had no other units in the relevant division. There was no requirement to follow Rule 7 (Registration as ISD), wherein the appellants had only one manufacturing unit. The eligibility of the appellants as regards availment of the CENVAT credit on the service tax paid on the input services was not questioned by the Commissioner (Appeals). Further, the provisions of Rule 7 of the CENVAT Credit Rules, 2004 come into play only if the appellants wished to get themselves registered as the input service credit distributor, which was not the situation in the instant case. Therefore, the appellants’ claim was allowed by the Tribunal.
