Custom, Excise & Service Tax Tribunal
Keva Fragrances P Ltd vs Mumbai-Iii on 16 February, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, MUMBAI
REGIONAL BENCH
Excise Appeal No. 85566 of 2016
(Arising out of Order-in-Appeal No. CD/839/MIII/2015 dated 05.10.2015
passed by the Commissioner of Central Excise (Appeals II), Mumbai)
M/s. Keva Fragrances Pvt. Ltd. Appellant
C/o. S.H. Kelkar & Co. Ltd.,
Survey No. 636 & 637 (Part),
LBS Marg, Mulund (W), Mumbai 400 080.
Vs.
Commissioner of Central Excise, Mumbai-III Respondent
3rd & 4th Floor, Vardaan Centre, MIDC,
Wagle Industrial Estate, Thane (W) 400 604.
WITH
Excise Appeal No. 85982 of 2016
(Arising out of Order-in-Appeal No. CD/36/MIII/2016 dated 01.12.2015
passed by the Commissioner of Central Excise (Appeals II), Mumbai)
M/s. Keva Fragrances Pvt. Ltd. Appellant
C/o. S.H. Kelkar & Co. Ltd.,
Survey No. 636 & 637 (Part),
LBS Marg, Mulund (W), Mumbai 400 080.
Vs.
Commissioner of Central Excise, Mumbai-III Respondent
3rd & 4th Floor, Vardaan Centre, MIDC,
Wagle Industrial Estate, Thane (W) 400 604.
WITH
Excise Appeal No. 87186 of 2016
(Arising out of Order-in-Appeal No. CD/462/MIII/2016 dated 29.06.2016
passed by the Commissioner of Central Excise (Appeals II), Mumbai)
M/s. Keva Fragrances Pvt. Ltd. Appellant
C/o. S.H. Kelkar & Co. Ltd.,
Survey No. 636 & 637 (Part),
LBS Marg, Mulund (W), Mumbai 400 080.
Vs.
Commissioner of Central Excise, Mumbai-III Respondent
rd th
3 & 4 Floor, Vardaan Centre, MIDC,
Wagle Industrial Estate, Thane (W) 400 604.
WITH
Excise Appeal No. 85260 of 2017
2 E/85566,85982,87186/2016,85260,85642/2017
(Arising out of Order-in-Appeal No. PK/189/MIII/2016 dated 29.12.2016
passed by the Commissioner of Central Excise (Appeals II), Mumbai)
M/s. Keva Fragrances Pvt. Ltd. Appellant
C/o. S.H. Kelkar & Co. Ltd.,
Survey No. 636 & 637 (Part),
LBS Marg, Mulund (W), Mumbai 400 080.
Vs.
Commissioner of Central Excise, Mumbai-III Respondent
rd th
3 & 4 Floor, Vardaan Centre, MIDC,
Wagle Industrial Estate, Thane (W) 400 604.
AND
Excise Appeal No. 85642 of 2017
(Arising out of Order-in-Appeal No. PK/190/MIII/2016 dated 16.01.2017
passed by the Commissioner of Central Excise (Appeals II), Mumbai)
M/s. Keva Fragrances Pvt. Ltd. Appellant
C/o. S.H. Kelkar & Co. Ltd.,
Survey No. 636 & 637 (Part),
LBS Marg, Mulund (W), Mumbai 400 080.
Vs.
Commissioner of Central Excise, Mumbai-III Respondent
3rd & 4th Floor, Vardaan Centre, MIDC,
Wagle Industrial Estate, Thane (W) 400 604.
Appearance:
Shri Yogesh Patki, Advocate, for the Appellant
Shri Shamshad Alam, Additional Commissioner, Authorised
Representative for the Respondent
CORAM:
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL)
FINAL ORDER NO. A/85125-85129/2022
Date of Hearing: 16.02.2022
Date of Decision: 16.02.2022
PER: SANJIV SRIVASTAVA
Against the orders of Commissioner of Central Excise
(Appeals-II) Mumbai II as detailed in table 1, appellant have
filed these five appeals.
Table 1
S No Order in Appeal No & Date Appeal No
1 CD/839/MIII/2015 dtd 05.10.2015 E/85566/2016
3 E/85566,85982,87186/2016,85260,85642/2017
2 CD/36/MIII/2016 dtd 01.12.2015 E/85982/2016
3 CD/462/MIII/2016 dtd 29.06.2016 E/87186/2016
4 PK/189/MIII/2016 dtd 29.12.2016 E/85260/2017
5 PK/190/MIII/2016 dtd 16.01.2017 E/85642/2017
2.1 Appellant had filed five refund claims in term of the Rule 5
of the CENVAT Credit Rules, 2004. These refund claims were
either partly allowed or rejected in toto by the jurisdictional
Assistant/Deputy Commissioners. Against the orders of the
jurisdictional Assistant/Deputy Commissioner, Appellant
preferred appeals before the Commissioner (Appeals), which
were partly allowed or completely rejected. The details of the
orders of Assistant/Deputy Commissioner and of Commissioner
(Appeals) are as per Table 2.
Table 2
S Refund Claim Order in Order in Amount
N Date Perio Amount 'Rs Original Appeal Rejected 'Rs
o d No/Date No/Date
1 31.01 Jul 3,00,66,312/- R/18/14-15 CD/839/MII 3,00,66,312/-
.2014 13 to 31.07.2014 I/2015
Sept 05.10.2015
13
2 29.12 Jan 1,59,19,662/- 26/14-15 CD/36/MIII 1,20,16,397/-
.2014 14 to 28.03.2015 /2016
Mar 01.12.2015
14
3 29.09 Jul 99,68,229/- 27/15-16 CD/462/MII 39,62,291/-
.2015 14 to 23.12.2015 I/2016
Sept 29.06.2016
14
4 23.03 Oct 1,41,53,240/- 08/15-16 PK/189/MII 1,01,61,321/-
.2016 14 to 24.06.2016 I/2016
Dec 29.12.2016
14
5 31.03 Jan 1,06,96,217/- 09/15-16 PK/190/MII 51,30,468/-
.2016 15 to 29.06.2016 I/2016
Mar 16.01.2017
15
2.2 Aggrieved by the orders of Commissioner (Appeals),
Appellant have preferred these appeals.
3.1 We have heard Shri Yogesh Patki, Advocate for the
appellant and Shri Shamshad Alam, Additional Commissioner,
Authorized Representative for the revenue.
3.2 Arguing for the Appellant, learned counsel submits that
Appellant is 100% Export Oriented Unit, and during the
entire period of dispute they have exported entirely
without any domestic clearance as is evident from the ER-
2 returns filed by them.
4 E/85566,85982,87186/2016,85260,85642/2017
The details of the credit availed by them have been duly
reflected by the appellants in their ER-2 returns and no
proceedings have been initiated against them for the
denial of the credit availed by them under Rule 14 of
CENVAT Credit Rules, 2004.
These refund claims have been filed by them in terms of
Rule 5 of the CENVAT Credit Rules, 2004 claiming refund
of the accumulated CENVAT Credit attributable to the
goods exported.
Refund claims have been denied/ modified for the reason
that
o there is no nexus between the goods exported and
the credit for which the refund claim has been made,
i.e. the accumulated credit do not pertain to the
quarter for which the refund claim has been filed.
o Service which was paid by them on reverse charge
basis was not payable as it was in respect of the
services exported, and hence the CENVAT Credit was
not admissible.
o Service tax payment by the provider of input
services is doubted.
o Credit not admissible as duplicate copy of the invoice
has not been produced.
Objective of Rule 5 is to refund the accumulated input
credits so that exports are zero rated as per Circular No
120/01/2010 dated 19/01/2010.
Further Rule 5 is not the mechanism for disputing the
credit for which no proceedings have been initiated in
terms of Rule 14 of the CENVAT Credit Rules, 2004 as
have been held in following decisions:
o Qualcomm India Pvt Ltd [2020 (43) GSTL 402 (T-
Hyd)]
o ADP Pvt Ltd [2020 (40) GSTL 349 (T-Hyd)]
o 3D PLM Software Solutions Ltd. [2018 (13) GSTL 325
(T)]
There is no requirement to establish direct nexus between
the goods exported and the credit for which the refund
claim has been made under Rule 5.
5 E/85566,85982,87186/2016,85260,85642/2017
o Fabrimax Engineering Pvt Ltd [2016 (344) ELT 920
(T)]
o Ravi Foods Ltd. [2011 (271) ELT 436 (T)}
o Amdocs Business Service Pvt Ltd 2013 (31) STR 249
(T)]
o Ambica International Pvt Ltd [2011 (266) ELT 262
(T)].
There is no requirement in law for the appellant to prove
the payment of Service tax by service provider for claiming
the refund under Rule 5 [Aarvee Denims & Exporters Ltd
[2010 (17) STR 262 (T)]
3.2 Arguing for revenue learned authorized representative
while re-iterating the findings recorded in the impugned order
submits:
Rule 5 of CENVAT Credit Rules, 2004 was amended in
the year 2012, and was substituted by the new Rule.
Also Notification No 27/2012-CE (NT) dated 18.06.2012
was issued superseding the earlier notification No
5/2006-CE (NT). Therefore the reliance placed by the
appellant on the circular of 2010 and the decisions of
the tribunal, which were in respect of earlier Rule 5 and
Notification No 5/2006-CE (NT) is not justified and
proper.
Rule 5 read with Notification No 27/2012, mandatorily
prescribe for filing of only refund claim per quarter as is
evident from the use of word "shall". It is settled
principle of interpretation that use of word shall in a
statue implies mandatory prescription as per the
decisions below:
o Asiatic Oxygen Ltd [1992 (57) ELT 583 (Cal)}
o Malaysian Airlines [2010 (202) ELT 192 (Bom)]
Reliance is also placed on the decisions as follows to
support the case of revenue:
o Doaba Co-operative Sugar Mills [1998 (37) ELT
478 (SC)]
o Rukmani Pakkwell Traders [2004 (166) ELT 481
(SC)]
o Dilip Kumar & Company [2018 (361) ELT 577
(SC)]
6 E/85566,85982,87186/2016,85260,85642/2017
o Modi Alkalies and Chemicals Ltd [2004 9171) ELT
155 (SC)]
4.1 We have considered the impugned order along with
the submissions made in appeal and during the course of
arguments.
4.2 Appellants have filed these refund claims under Rule
5 of the CENVAT Credit Rules, 2004. The rule 5 as amended
at the relevant time and the Notification No 27/2012-CE (NT)
as it was then is reproduced below:
5. Refund of CENVAT Credit. -
(1) A manufacturer who clears a final product or an intermediate
product for export without payment of duty under bond or letter
of undertaking, or a service provider who provides an output
service which is exported without payment of service tax, shall
be allowed refund of CENVAT credit as determined by the
following formula subject to procedure, safeguards, conditions
and limitations, as may be specified by the Board by notification
in the Official Gazette:
(Export turnover of goods+ Net
Refund
= Export turnover of services) x CENVAT
amount
Total turnover credit
Where,-
(A) Refund amount means the maximum refund that is
admissible;
(B) Net CENVAT credit means total CENVAT credit availed on
inputs and input services by the manufacturer or the output
service provider reduced by the amount reversed in terms
of sub-rule (5C) of rule 3, during the relevant period;
(C) Export turnover of goods means the value of final products
and intermediate products cleared during the relevant
period and exported without payment of Central Excise duty
under bond or letter of undertaking;
(D) Export turnover of services means the value of the export
service calculated in the following manner, namely:-
Export turnover of services = payments received during the
relevant period for export services + export services whose
provision has been completed for which payment had been
received in advance in any period prior to the relevant
period - advances received for export services for which the
provision of service has not been completed during the
relevant period;
(E) Total turnover means sum total of the value of -
(a) all excisable goods cleared during the relevant period
including exempted goods, dutiable goods and excisable
goods exported;
7 E/85566,85982,87186/2016,85260,85642/2017
(b) export turnover of services determined in terms of clause
(D) of subrule (1) above and the value of all other
services, during the relevant period; and
(c) all inputs removed as such under sub-rule (5) of rule 3
against an invoice, during the period for which the claim is
filed.
(2) This rule shall apply to exports made on or after the 1st
April, 2012:
Provided that the refund may be claimed under this rule, as
existing, prior to the commencement of the CENVAT Credit
(Third Amendment) Rules, 2012, within a period of one year
from such commencement:
Provided further that no refund of credit shall be allowed if the
manufacturer or provider of output service avails of drawback
allowed under the Customs and Central Excise Duties and
Service Tax Drawback Rules, 1995, or claims rebate of duty
under the Central Excise Rules, 2002, in respect of such duty; or
claims rebate of service tax under the Export of Services Rules,
2005 in respect of such tax.
Explanation 1.- For the purposes of this rule,-
{1) "export service" means a service which is provided as per
the provisions of Export of Services Rules, 2005, whether the
payment is received or not;
(2) "relevant period" means the period for which the claim is
filed.
Explanation 2.-For the purposes of this rule, the value of
services, shall be determined in the same manner as the value
for the purposes of sub-rule (3) and (3A) of rule 6 is determined.
Notification No 27/2012-CE (NT) dated 18.06.2012
Cenvat credit -- Procedure for Refund -- Notification No.
5/2006-C.E. (N.T.) superseded
In exercise of the powers conferred by rule 5 of the CENVAT
Credit Rules, 2004 (hereinafter referred to as the "said rules"),
and in supersession of the notification of the Government of
India in the Ministry of Finance (Department of Revenue), No.
5/2006-Central Excise (N.T.), dated the 14th March, 2006,
published in Gazette of India, Extraordinary, Part II, Section 3,
Sub-section (i) vide number G.S.R 156(E), dated the 14th
March, 2006, the Central Board of Excise and Customs hereby
directs that refund of CENVAT credit shall be allowed subject to
the procedure, safeguards, conditions and limitations as
specified below, namely :-.
2. Safeguards, conditions and limitations. - Refund of
CENVAT Credit under rule 5 of the said rules, shall be subjected
to the following safeguards, conditions and limitations, namely :-
(a) the manufacturer or provider of output service shall
submit not more than one claim of refund under this rule for
every quarter :
Provided that a person exporting goods and service
simultaneously, may submit two refund claims one in respect of
goods exported and other in respect of the export of services
every quarter.
8 E/85566,85982,87186/2016,85260,85642/2017
(b) in this notification quarter means a period of three
consecutive months with the first quarter beginning from 1st
April of every year, second quarter from 1st July, third quarter
from 1st October and fourth quarter from 1st January of every
year.
(c) the value of goods cleared for export during the quarter
shall be the sum total of all the goods cleared by the exporter for
exports during the quarter as per the monthly or quarterly
return filed by the claimant.
(d) the total value of goods cleared during the quarter shall be
the sum total of value of all goods cleared by the claimant during
the quarter as per the monthly or quarterly return filed by the
claimant.
(e) in respect of the services, for the purpose of computation
of total turnover, the value of export services shall be
determined in accordance with clause (D) of sub-rule (1) of rule
5 of the said rules.
(f) for the value of all services other than export during the
quarter, the time of provision of services shall be determined as
per the provisions of the Point of Taxation Rules, 2011.
(g) the amount of refund claimed shall not be more than the
amount lying in balance at the end of quarter for which refund
claim is being made or at the time of filing of the refund claim,
whichever is less.
(h) the amount that is claimed as refund under rule 5 of the
said rules shall be debited by the claimant from his CENVAT
credit account at the time of making the claim.
(i) In case the amount of refund sanctioned is less than the
amount of refund claimed, then the claimant may take back the
credit of the difference between the amount claimed and amount
sanctioned.
3. Procedure for filing the refund claim. - (a) The
manufacturer or provider of output service, as the case may be,
shall submit an application in Form A annexed to the notification,
to the Assistant Commissioner of Central Excise or Deputy
Commissioner of Central Excise, as the case may be, in whose
jurisdiction,-
(i) the factory from which the final products are exported is
situated.
(ii) the registered premises of the provider of service from
which output services are exported is situated.
(b) The application in the Form A along with the documents
specified therein and enclosures relating to the quarter for which
refund is being claimed shall be filed by the claimant, before the
expiry of the period specified in section 11B of the Central Excise
Act, 1944 (1 of 1944).
(c) The application for the refund should be signed by-
(i) the individual or the proprietor in the case of proprietary
firm or karta in case of Hindu Undivided Family as the case may
be;
(ii) any partner in case of a partnership firm;
(iii) a person authorized by the Board of Directors in case of a
limited company;
9 E/85566,85982,87186/2016,85260,85642/2017
(iv) in other cases, a person authorized to sign the refund
application by the entity.
(d) The applicant shall file the refund claim along with the
copies of bank realization certificate in respect of the services
exported.
(e) The refund claim shall be accompanied by a certificate in
Annexure A-I, duly signed by the auditor (statutory or any other)
certifying the correctness of refund claimed in respect of export
of services.
(f) The Assistant Commissioner or Deputy Commissioner to
whom the application for refund is made may call for any
document in case he has reason to believe that information
provided in the refund claim is incorrect or insufficient and
further enquiry needs to be caused before the sanction of refund
claim.
(g) At the time of sanctioning the refund claim the Assistant
Commissioner or Deputy Commissioner shall satisfy himself or
herself in respect of the correctness of the claim and the fact
that goods cleared for export or services provided have actually
been exported and allow the claim of exporter of goods or
services in full or part as the case may be.
Annexure
FORM A
Application for refund of CENVAT Credit under rule 5 of
the CENVAT Credit Rules, 2004 for the Quarter ending
d d m m y y y y
To,
The Assistant Commissioner or Deputy Commissioner of Central
Excise,
..................................................................................................
Sir, I/We have exported, the final products or output services during the Quarter and am/are claiming the refund of CENVAT Credit in terms of Rule 5 of the CENVAT Credit Rules, 2004 as per the details below :
S. Description Amount in No. Rs.
1. Total value of the goods cleared for export and exported during the quarter.
2. Export turnover of the services determined in terms of Clause D of sub-rule (1) of rule 5.
3. Total CENVAT Credit taken on inputs and input services during the quarter.
4. Amount reversed in terms of sub-rule (5C) of rule 3
5. Net CENVAT Credit = (3) - (4)
6. Total value of all goods cleared during the 10 E/85566,85982,87186/2016,85260,85642/2017 quarter including exempted goods, dutiable goods and goods for export.
7. Export turnover of services and value of all other services, provided during the said quarter.
8. All inputs removed as such under sub-rule (5) of rule 3, against an invoice during the quarter.
9. Total Turnover = (6) + (7) + (8)
10. Refund amount as per the formula = (1) * (5)/(9), in respect of goods exported.
11. Refund amount as per the formula = (2) * (5)/(9), in respect of services exported.
12. Balance of CENVAT Credit available on the last day of quarter.
13. Balance of CENVAT Credit available on the day of filing the refund claim.
14. Amount claimed as refund, [Amount shall be less than the minimum of (10), (12) and (13) in case of goods or the minimum of (11), (12) and (13) in case of services]
15. Amount debited from the CENVAT account [shall be equal to the Amount claimed as refund (14)] 2.0 Details of the Bank Account to which the refund amount to be credited : Refund sanctioned in my favour should be credited in my/ our bank account.
Details furnished below;
(i) Account Number : (ii) Name of the Bank : (iii) Branch (with address) : 3.0 Declaration (i) I/We certify that the aforesaid particulars are correct.
(ii) I/We certify that we satisfy all the conditions that are contained in rule 5 of the CENVAT Credit Rules, 2004 and in Notification No. ......./2012-C.E. (N.T.), dated ___ June, 2012.
(iii) I/We am/are the rightful claimant(s) of the refund of CENVAT Credit in terms of rule 5, the same may be allowed in our favour.
(iv) I/We declare that no separate claim for drawback or refund has been or will be made under the Customs and Central Excise Duties Service Tax Drawback Rules, 1995 or for claim of rebate under Central Excise Rules, 2002 or the Export of Services Rules, 2005 or under Section 93 or 93A of Finance Act, 1994( 32 of 1994).
(v) I/We declare that we have not filed or will not file any other claim for refund under rule 5 of CENVAT Credit Rules, 2004, for the same quarter to which this claim relates.
Date d d m m y y y y Signature of the ...................
Claimant .
Name of the Claimant ...................
11 E/85566,85982,87186/2016,85260,85642/2017
Registration Number ...................
Address of the Claimant ...................
4.0 Enclosures :
(i) Copies of Customs Certified ARE-1 form along with the copies of shipping bill and bill of lading in case of the export of goods.
(ii) Copies of the Bank Realization Certificates for the export of services. [refer 3(d)]
(iii) Certificate in Annexure A-I from the Auditor (statutory or any other) certifying the correctness of refund claimed in respect of export of services. [refer 3(e)]
5.0 Refund Date d d m m y y y y Order No. The refund claim filed by Shri/Messrs _____has been scrutinized with the relevant Central Excise/ Service Tax records. The said refund claim has been examined with respect to relevant enclosures and has/has not been found in order. A refund of Rs. ________ (Rupees ________) is sanctioned/The refund claim filed is rejected.
Assistant Commissioner or Deputy Commissioner of Central Excise Forwarded to-
(i)The Chief Accounts officer, Central Excise, for information and necessary action.
(ii)The Commissioner of Central Excise.
Assistant Commissioner or Deputy Commissioner of Central Excise ___________________________________________________ ________________
(i) Passed for payment of Rs. ___ (Rupees ___) The amount is adjustable under head "0038 - Union Excise Duties - Deduct Refunds/0044 - Service tax - Deduct Refunds".
(ii) Amount credited to the account of the claimant as per the details below:
Amount refunded Account Number Reference No. of transfer Name of the Bank Address of the Branch Date d d m m y y y y Chief Accounts officer Annexure A-I It is certified that :
(a) I am qualified auditor to audit the books of account of M/s. ____________
(b) I have audited the books of account of M/s. ____ for the quarter ending __ 12 E/85566,85982,87186/2016,85260,85642/2017
(c) The value of the export turnover of services and total turnover of services mentioned at S. No. 2 and 7 in the table in Form A
(i) Is correct as per the books of account and relevant records of M/s ______
(ii) Is in accordance with the provisions of rule 5 of the CENVAT Credit Rules, 2004.
Dat d d m m y y y y Auditor e 4.3 Arguing for revenue learned authorized representative has
relied upon decisions of various authorities laid lot of emphasis on the phrase "shall submit not more than one claim of refund under this rule for every quarter" used in clause 2 (a) of the notification referred above, to argue that appellant was barred from filing more than one refund claim in terms of the said notification. However we find appellant has not submitted more than one refund claim in any quarter, as is evident from the table 2. From the reading of clause 2, it is evident that the term quarter has been used qua the exports made and not the CENVAT Credit taken. Hence we do not agree with the submissions made by the revenue that appellants have filed more than one refund claim for any quarter.
4.4 The refund claims as filed by have been partly or in toto rejected by the authorities below mainly for the reasons:
The part of refund claimed has been rejected for the reason that the invoices/ bills on which the CENVAT Credit has been taken and is claimed as refund are for earlier period and not for the quarter for which refund has been claimed.
The credit of service tax paid by the appellants on reverse charge is not admissible to the appellant, as these services were provided outside and hence service tax was not payable. Therefore refund of this amount claimed as credit is not admissible 4.5 From the reading of Rule 5 as reproduced above it is providing for the refund of the accumulated CENVAT Credit in the books of account against the goods exported under Bond or letter of undertaking and the services exported. The basic principle which is being provided by the said Rule, is as per the avowed policy of the Government to reduce the prices of export so that they are internationally competitive. It is also imperative 13 E/85566,85982,87186/2016,85260,85642/2017 to note that no country will like to export the taxes leviable locally along with the goods and services exported. To accomplish this Government has provided for various schemes to zero rate the goods and services exported.
4.6 Rule 3 of the CENVAT Credit Scheme provides for the availment and utilization of the various duties and taxes paid by the manufacturer of goods and provider of output services. Rule 4 provides for the conditions to be followed by the person availing the credit. Rule 5 provides for the Refund of accumulated CENVAT Credit on the goods and services exported, and so on. Rule 14 of the said rules provide as follows:
RULE 14. Recovery of CENVAT credit wrongly taken or erroneously refunded. --
(1) (i) Where the CENVAT credit has been taken wrongly but not utilised, the same shall be recovered from the manufacturer or the provider of output service, as the case may be, and the provisions of section 11A of the Excise Act or section 73 of the Finance Act, 1994 (32 of 1994), as the case may be, shall apply mutatis mutandis for effecting such recoveries;
(ii) Where the CENVAT credit has been taken and utilised wrongly or has been erroneously refunded, the same shall be recovered along with interest from the manufacturer or the provider of output service, as the case may be, and the provisions of sections 11A and 11AA of the Excise Act or sections 73 and 75 of the Finance Act, 1994, as the case may be, shall apply mutatis mutandis for effecting such recoveries.
4.7 From the reading of the provisions of Rule 14 it is quite evident that if for a moment it is accepted that certain credit were wrongly or erroneously taken by the appellant contrary to the provisions contained in Rule 3 and 4 of the said Rules, then the same could have been denied by following the procedure as laid down in Rule 14. The so availed erroneous credit cannot be the subject matter of proceedings of Refund in terms of Rule 5 of the CENVAT Credit Rules, 2004. In these cases even if the refund claim is denied on the ground as stated by the impugned order then the same will be credited back to the CENVAT Account of the appellants and if possible appellant can utilize the same for payment of goods/ services cleared by them 14 E/85566,85982,87186/2016,85260,85642/2017 subsequently. Admittedly and undisputedly no proceedings for denial of any CENVAT Credit as claimed by the appellants, for encashment of which they have filed these refund claims have been initiated by the revenue.
4.8 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. It is now well settled principle of law that where a statute provides for a thing to be done in a particular manner, then it has to be done in that manner, and in no other manner.
4.9 In the case of Chandra Kishore Jha vs. Mahavir Prasad, [1999 (8) SCC 266 ](para 12), a three Judges bench Hon'ble Supreme Court has referred the said principle as follows "It is a well-settled salutary principle that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner. (See with advantage : Nazir Ahmad v. King Emperor, 63 Indian Appeals 372=AIR 1936 PC 253; Rao Shiv Bahadur Singh & Anr. V. State of Vindhya Pradesh, 1954 SCR 1098 = AIR 1954 SC 322. State of Utter Pradesh v. Singhan Singh & Ors., AIR 1964 SC 358 = (1964) 1 SCWR 57]"
4.10 Hon'ble Apex Court has similarly in case of Dhananjaya Reddy vs. State of Karnataka, [(2001) 4 SCC 9](para 22), stated the said principle as follows:
"Relying upon Nazir Ahmad's case and applying the principles laid down in Taylor v. Taylor [(1876) 1 Ch.D 426] this Court in Singhara Singh's case (supra) held:
"The rule adopted in Taylor v. Taylor [(1876) 1 Ch.D 426] is well recognised and is founded on sound principle. Its result is that if a statute has conferred a power to do an act and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any other manner than that which has been prescribed. The principle behind the 15 E/85566,85982,87186/2016,85260,85642/2017 rule is that if this were not so, the statutory provision might as well not have been enacted. ......""
4.11 In the case of Hussein Ghadially v. State of Gujarat [(2014) 8 SCC 425] "19. Thirdly, because if the Statute provides for a thing to be done in a particular manner, then it must be done in that manner alone. All other modes or methods of doing that thing must be deemed to have been prohibited. That proposition of law first was stated in Taylor v. Taylor (1876) 1 Ch. D426 and adopted later by the Judicial Committee in Nazir Ahmed v. King Emperor AIR 1936 PC 253 and by this Court in a series of judgments including those in Rao Shiv Bahadur Singh & Anr. v. State of Vindhya Pradesh AIR 1954 SC 322, State of Uttar Pradesh v. Singhara Singh and Ors. AIR 1964 SC 358, Chandra Kishore Jha v. Mahavir Prasad & Ors. 1999 (8) SCC 266, Dhananjaya Reddy v. State of Karnataka 2001 (4) SCC 9 and Gujarat Urja Vikas Nigam Ltd. V. Essar Power Ltd. 2008 (4) SCC
755. The principle stated in the above decisions applies to the cases at hand not because there is any specific procedure that is prescribed by the Statute for grant of approval but because if the approval could be granted by anyone in the police hierarchy the provision specifying the authority for grant of such approval might as well not have been enacted."
4.12 In case of Qualcomm India Pvt Ltd [2020 (43) GSTL 402 (T-Hyd)], Hyderabad bench has expressed same view stating as follows:
"6. Rule 3 of the Cenvat Credit Rules, 2004 is the enabling provision, which entitles a manufacturer of excisable goods and the provider of output service to take Cenvat credit of the duties and taxes paid on the inputs and the input services, with the objective of utilisation of the same for payment of Excise duty on the products and service tax on the output services. In case of exportation of output service, there is no question of utilisation of Cenvat credit available in the books of accounts. Thus, Rule 5 ibid provides for refund of accumulated Cenvat credit, subject to compliance of the procedures/guidelines laid down under the notifications issued thereunder. We find that the refund benefit was denied to the assessee-appellant on the sole ground that there was no nexus between the input services and the output 16 E/85566,85982,87186/2016,85260,85642/2017 service exported by the appellant. Further, in Revenue's appeal, it has been contended that certain disputed services are not conforming to the definition of input service provided under Rule 2(l) ibid. Insofar as taking of irregular Cenvat credit is concerned, Rule 14 ibid clearly mandates that in case of irregular availment of credit or its utilisation, such credit can be recovered from the assessee and for effecting the recoveries, the provisions of Section 11A of the Central Excise Act, 1944/Section 73 of the Finance Act, 1994 shall apply mutatis mutandis. It is an admitted fact on record that the department has not invoked the provisions of Rule 14 ibid for effecting recovery of the alleged irregular Cenvat credit availed by the assessee-appellant. Thus, under such circumstances, it can be said that taking of Cenvat credit on the disputed services by the appellant is in conformity with the Cenvat statute. Rule 5 ibid nowhere specifies that Cenvat credit can be denied on the ground of irregular availment or utilisation of the same. Thus, in absence of specific provisions contained in the statute, denial of the refund benefit provided under Rule 5 ibid, in our considered opinion, cannot stand for judicial scrutiny. Since the department has not specifically alleged regarding actual exportation of services by the assessee-appellant and use/utilization of disputed services for such activities, benefit of refund should be available in terms of the unambiguous provisions contained in Rule 5 ibid, subject only to adherence of the formula laid down thereunder. The Learned Advocate appearing for the assessee-appellant submitted that it should be entitled for the benefit of interest for non-consideration of the refund application within the stipulated time-frame prescribed under the statute. However, on perusal of the case records, more specifically the grounds of appeal annexed to the appeal memorandum, we find that the assessee- appellant has not raised any plea on the issue of payment of interest therein. Since such issue is not arising out of the appeal proceedings before the Tribunal, it will not be appropriate to consider such plea at this juncture for a decision as emphasized by the Learned Advocate for the appellant."
4.13 In case of ADF Pvt Ltd [2020 (40) GSTL 349 (T-Hyd)], again Hyderabad bench, has observed as follows:
17 E/85566,85982,87186/2016,85260,85642/2017
6. We have considered the arguments of the Learned AR and perused the records. It is a well settled principle that availment of Cenvat credit, its utilisation and its refund are different aspects dealt with under CCR, 2004. Rule 5 of Cenvat Credit Rules, 2004 provides for refund of Cenvat credit in respect of goods/services exported out of India. Nowhere in this Rule 5, is there a provision to determine whether availment of Cenvat credit in the first place is correct or otherwise. There is a separate provision for recovery of irregularly availed Cenvat credit under Rule 14 of Cenvat Credit Rules, 2004. There are also provisions for recovery of interest as well as imposition of penalties if any Cenvat credit is irregularly availed. Therefore, we agree with the appellant that the 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. In view of the above, we find that the rejection of refund claim on this ground is not correct and needs to be set aside. ...."
4.14 In view of the discussions as above we do not find any merits in the impugned order.
5.1 The impugned orders are set aside and all the five appeals allowed.
(Order pronounced in the open court) (Sanjiv Srivastava) Member (Technical) (Dr. Suvendu Kumar Pati) Member (Judicial) tvu