2015 (4) TMI 1063 - AT - Service Tax

Refund of cenvat credit - Nexus between input and export of output services - Held that - t any input service which has a nexus with the business of manufacture or relating to business would get covered under the term input service under Rule 2(l) of the Cenvat Credit Rules and accordingly Cenvat credit on such services would be available. - service tax paid on car parking rentals is an eligible input service under Rule 2(l) of the Cenvat Credit Rules and consequently the appellant would be eligible for refund of the same under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 5/2006-S.T., dated 14-3-2006. - Refund allowed - Decided in favor of assessee.

Summary

Issues:
1. Rejection of refund of `5.58 lakhs on the ground of services not directly related to export of services.

Analysis:
The appeal challenged the rejection of a refund claim amounting to `5.58 lakhs due to services for which input Cenvat Credit was availed not being directly related to the export of services. The lower authorities had denied the refund in relation to various services, including premium paid for group mediclaim insurance for employees and their families, service tax on car parking rentals, and consultancy charges for reviewing employee performance. The appellant argued that similar issues had been previously decided in their favor in other cases, citing precedents such as PTC Software (India) P. Ltd. 2014 (35) STR 632. The Tribunal noted that the insurance premium paid for group insurance, which also covered family members of employees, was considered an eligible input service based on previous decisions by the Tribunal and the High Court of Karnataka. Similarly, the Tribunal held that service tax paid on car parking rentals was an eligible input service as it had a nexus with the business, citing the ruling in Ultratech Cement Ltd. 2010 (20) S.T.R. 577 (Bom.). The Tribunal emphasized that the issue was now settled in favor of the appellant, referencing the decision in KPMG vs. CCE 2014 (33) STR 96 by the Principal bench of the Tribunal in New Delhi. Consequently, the Tribunal set aside the impugned order, allowing the appeal with any consequential relief.

This detailed analysis highlights the key arguments, legal precedents, and reasoning behind the Tribunal's decision to overturn the rejection of the refund claim based on the direct relation of services to the export of services. The judgment underscores the importance of legal precedents and authoritative judicial pronouncements in resolving such disputes and ensuring fair treatment in matters of tax refunds and input credit eligibility.