2014 (5) TMI 1108 - AT - Service Tax

Denial of refund of Cenvat credit - availed on input services - Event management servicesm, real estate agent service, consultant service, tour operator service and travel agent service - RFefund claimed on the ground that credit could not be utilized because the output service is exported and accumulated CENVAT credit is to be refunded under Rule 5 of CENVAT Credit Rules 2004 under Notification No. 5/06 NT dated 14.03.2006. Held that - appellant has made out a complete case for eligibility for refund in respect of service tax paid on all the above input services. However, the matter has to be remanded for the purpose of verification of documents and records and sanction of refund and payment of the amount to the appellant. - Appeal allowed by way of remand

Summary

Issues:
- Appeal against denial of refund of CENVAT credit on input services including event management, real estate agent, consultant, tour operator, and travel agent services.
- Interpretation of eligibility for refund under Rule 5 of CENVAT Credit Rules 2004 and Notification No. 5/06 NT dated 14.03.2006.
- Nexus of input services with the provision of output service for claiming credit.
- Applicability of precedents in determining eligibility for refund.

Analysis:
1. The appellants appealed against the denial of refund of CENVAT credit availed on various input services, arguing that the credit remained unutilized due to the export of output services. The contention was based on Rule 5 of CENVAT Credit Rules 2004 under Notification No. 5/06 NT dated 14.03.2006.

2. The learned counsel presented arguments regarding the utilization of different input services. Event management services were used for employee interaction and business promotion, real estate agent services for property identification and temporary accommodation, and tour operator/travel agent services for business travels. Precedents such as Dell International Services India Pvt. Ltd. Vs CCE Bangalore and Cadmach Machinery Co. Pvt Ltd Vs CCE Ahmadabad were cited to support the eligibility of these services as input services.

3. The decision in Satyam Computer Services Ltd. Vs CST, Hyderabad was referenced by the learned A.R., highlighting a lack of clarity regarding the nexus of event management and health/fitness services with the provision of output service. The tribunal's reliance on GTC Industries Ltd. case was noted, but subsequent decisions contradicting this view were acknowledged, indicating the non-applicability of the GTC Industries decision as a precedent in the present case.

4. Ultimately, the Tribunal found in favor of the appellants, concluding that they had established a case for refund eligibility concerning the service tax paid on the mentioned input services. However, the matter was remanded for document verification and refund sanction, with the appeal allowed for the purpose of refund processing in accordance with the law, subject to the observations made during the proceedings.