2014 (9) TMI 1036 - AT - Service Tax

Refund claim - Admissibility, if Cenvat credit not admissible as output service not taxable - Held that Relying on paragraph 6.12 of the Interim Order Nos. 79 to 152/2014 dated 18.9.2014 in case of M/s Apotex & Others 2015 (3) TMI 346 - CESTAT BANGALORE, the refund claim is admissible. Refund claim - Barred by limitation under Section 11B of Central Excise Act 1944 - Held that Limitation is considered as per paragraph 6.15 of the Interim Order Nos. 79 to 152/2014 dated 18.9.2014 in case of M/s Apotex & Others 2015 (3) TMI 346 - CESTAT BANGALORE, and paragraph 6.16 on method of calculating relevant date. The claim is within the normal period.Therefore, as regards nexus, the same has to be considered in accordance with the Interim Order (supra). - Decided in favour of appellant

Summary

Issues Involved:
Refund claim filed by the appellant for the period from March 2007 to March 2008 amounting to nearly Rs. 80 lakhs. The first issue is whether "output service" is taxable, impacting the admissibility of Cenvat credit and refund. The second issue is whether the refund claim is barred by limitation under Section 11B of the Central Excise Act, 1944.

Analysis:

Issue 1: Taxability of "Output Service"
The appellant, a subsidiary of a US corporation, provides various services such as Product Development, Systems Engineering, IT Support, and R&D. The primary contention is whether "output service" is taxable, affecting the admissibility of Cenvat credit and subsequent refund. Citing a relevant Interim Order, the Tribunal ruled in favor of the appellant on this issue. The Tribunal's decision aligns with the argument presented by the appellant's counsel, emphasizing the non-taxable nature of the "output service."

Issue 2: Limitation under Section 11B
The second issue pertains to the limitation period under Section 11B of the Central Excise Act, 1944, concerning the refund claim. The appellant argued that the claim falls within the normal period, as per the guidelines outlined in the Interim Order. The Tribunal considered the provisions of Section 11B and the method of calculating the relevant date, as discussed in the Interim Order. It was concluded that the refund claim is not barred by limitation, and the nexus aspect should be evaluated in accordance with the Interim Order.

Conclusion:
In light of the above analysis, the impugned order was set aside, and the matter was remanded to the original adjudicating authority for a decision on the refund claim in line with the observations made in the relevant Interim Order. The Tribunal's decision provides clarity on the taxability of "output service" and the applicability of the limitation period under Section 11B, ensuring a fair and just resolution of the issues raised by the appellant in the refund claim.