EOUs – where to claim refund of unutilised Cenvat Credit? – CBEC issues another secret clarification.
In port cities like Chennai, Mumbai and Kolkata, also in Bangalore, EOUs are under the administrative control of customs formations in terms of Board circular No. 31/2003- Cus dt . 7.04.2003. The EOUs , EHTP , STP units are entitled for claiming rebate of service tax paid on taxable service exported or service tax paid on inputs and input services used providing such taxable services. Further, as per Rule 5 of Cenvat Credit Rules 2004 the refund of accumulated CENVAT credit is admissible in those cases where a manufacturer or provider of output service is not in a position to utilize the input credit or input service credit taken. In this regard an issue has been raised as to which authority (i.e Customs formation or Service Tax formation) should disburse such rebate of service tax or refund of accumulated credit in the port cities. It is reported that due to this confusion EOU / EHTP / STP units located in some of these places are not getting rebate/refund in time.
The issue was examined in full Board meeting held on 22.10.2007. It was decided that the rebate or refund of unutilized credit in respect of input and input services used in relation to manufacture of goods which are exported by EOUs would be processed and disbursed by the jurisdictional central excise or customs authority and not by the service tax Commissionerate . However, if an EOU provides/exports taxable services it would register itself with the jurisdictional service tax Commissionerate and refund or rebate in respect of inputs or input services used for export of such services would be sanctioned by the service tax Commissionerates . Other controls relating to registration, filing of return etc. in respect of EOUs liable to pay service tax or engaged in provision of taxable service would remain the same as it exists at present i .e. they should be registered with the service tax Commissionerates .
This important clarification meant to solve the problems of EOUs is hidden in a letter written by the Board to the Chief Commissioners. Why can't this decision of the Full Board be made public and given enough publicity? It simply beats logic as to why the Board is shy of making public its good deeds public? And why can't such important instructions be issued through public circulars instead of private letters? God and Board should have the answer!
CBEC F.No . 137/82/2007- CX.4 (Pt.) Dated : : 24 th Oct, 2007