No Denial of Accumulated CENVAT Credit Refund even if Exported Service is Non-Taxable: CESTAT...

In a pro-exporter ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has directed the tax authorities to grant a refund of Rs 61.12 lakh for accumulated CENVAT credit. The tribunal held that a refund cannot be denied even if the service that was exported is a non-taxable service. The case involved an exporter who had used various taxable input services to provide an output service that was exported. Since the output service was exported, it was not subject to service tax. The department had denied the refund of the taxes paid on the input services. However, the CESTAT ruled that the export of any service, whether taxable or not, is to be encouraged, and the taxes borne on the inputs must be refunded to ensure that they are not exported. This judgment upholds the principle of "zero-rating of exports."