2026-VIL-1165-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax - Refund of Unutilized Input Service Credit on Export of Services - Whether refund of Cenvat credit availed after the date of last export invoice issued in a particular quarter is permissible under Notification No. 5/2006-CX (NT), dated 14th March 2006, Condition No. 4, which provides that refund is allowed only where a provider of output service is not in a position to utilize input service credit against goods exported during the quarter or month to which the claim relates – HELD - A narrow and restrictive interpretation of Condition No. 4 would defeat the very object of the notification and deprive the assessee of their rightfully intended benefit in law. The refund under the notification is considered on a quarterly basis and not on the basis of each singular export event. What is material and germane to the scheme is the ascertainment of the total unutilized input tax credit available at the end of the quarter - A mere timing difference in availing admissible Cenvat credit within the same quarter does not become a reason for denial of refund as long as the admissibility of such Cenvat credit is not disputed - The rejection of proportionate refund by giving the Notification a very restrictive interpretation is futile as Cenvat credit rejected against a claim of a particular quarter would certainly be available for refund in subsequent quarters - The order of the appellate authority is set aside, allowing refund of unutilized input service credit availed within the relevant quarter regardless of the timing of availment relative to the last export invoice date – The appeal is allowed
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