CESTAT allowed refund to 100% EOU where no one-to-one co-relation of the input services with the Export of Service

Categories: Advance Ruling
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CESTAT allows refund under Rule 5 of CENVAT Credit Rules, 2004 (CCR) to 100% EOU engaged in providing Banking and Other Financial Services (“BoFS”), accepts appellants plea that, rejection of refund on ground of improper tabulation of export turnover, was erroneous, considering that assessee was an EOU and did not render any service in India during the relevant period.


M/s. Walton Street India Real Estate Advisors Pvt. Ltd. (“the appellant”) is a 100% Export Oriented Unit (“EOU”) and registered with the Department under the category of BoFS, Real Estate Agent, etc. The appellant has applied for a refund of CENVAT Credit on inward services, as they were not able to utilize the CENVAT Credit on exporting the services.

A Show Cause Notice (“SCN”) was issued inter-alia stating that the period of input service documents on the basis of which credit has been taken and refund claimed, do not match the period of export documents and it appears that refund claim is not admissible for sanction.

Issue Involved:

Whether the refund of CENVAT Credit has been rightly denied in terms of rule 5 of CENVAT Credit Rules read with Notification No.27/2012–CE dated June 18, 2012?


The Hon’ble CESTAT Mumbai vide its Final Order No. A/88577/2019 dated May 10, 2019 wherein it was held that the appellant has exported the service and also observing that the Adjudicating Authority has erred in observing that “it is mentioned in FIRC that the same is for part payment of the management fee, which is totally different from the services provided by the Assessee under ‘banking and financial services’ is beyond the scope of the SCN, and at the same time have erred in holding that the calculation of export of turnover is erroneous, ignoring the fact that the Appellant is an EOU and did not render any service in India during the relevant period”. 

Further, the HC observed that under the scheme of the refund, there is no requirement of one-to-one co-relation of the input services or input credit with the export of service. Accordingly, the appeal is allowed holding that the appellant is entitled to refund of the amount in question. The Adjudicating authority shall grant the refund within a period of 45 days from the date of receipt of a copy of this order along with interest as per rules.

Citation: TS-451-CESTAT-2019-EXC