In the case of Cross Tab Marketing Services (P.) Ltd. vs. Commissioner of CGST, Mumbai reported in  132 taxmann.com 201 (Mumbai – CESTAT), the appellant is engaged in export of service and was availing the benefit of CENVAT credit of duty and service tax paid on various input services such as renting of immovable property, telecommunication, membership and subscription, market research, conveyance, courier, banking, office maintenance, Web server hosting, printing & stationary and air travel agency services.
The appellant has filed a refund claim of accumulated credit in terms of provisions of Rule 5 of CENVAT Credit Rules, 2004 (as amended vide NN 18/2012 -CX (NT) dated 07.03.2012) read with NN 27/2012-CX (NT). The said refund claim was rejected by the Deputy Commissioner Service Tax on the contention that CENVAT credit taken by the appellant on some of input services is inadmissible as they do not qualify as input services.
The Hon’ble CESTAT of Mumbai, while rejecting the order of Commissioner (Appeals) stated that the amended rule 5, does not require establishment of any nexus between the input services and the exported services. The rule only provides that the admissible refund will be proportional to the ratio of export turnover of goods and services to the total turnover, during the period under consideration, of the Net CENVAT credit taken during that period. It has also been stated that if the quantum of the Cenvat Credit is sought to be varied, by holding that certain services do not qualify as input services then the same could have been done by invoking the provisions of Rule 14 of the CENVAT Credit Rules, 2004.
Similar view has been expressed by the tribunal in case of TPG Capital India (P.) Ltd. v. Commissioner of CGST [Final Order Nos. A/86651-86655/2019, dated 20-9-2019]. Tribunal has observed therein stating that rule 5 allows refund of accumulated credit and at the time of grant of refund, the Revenue is not permitted to examine the availability of the CENVAT credit. Such an exercise was required to be adopted by the Revenue at the time of availment of credit, by way of initiation of separate proceedings.
The Hon’ble CESTAT of Mumbai has held that entire credit as claimed by the Appellant for determining the refund amount is held admissible if not held admissible in proper proceedings initiated under Rule 14 of the CENVAT Credit Rules, 2004.