2015 (7) TMI 1198 - AT - Service Tax

Refund claim - Advertisement and sponsorship service - denial on account that the said service has been utilized for promotion of Brand HCL, which includes the other units apart from the appellant herein - Held that - the appellant has already been granted the refund benefit with regard to the disputed services by this Tribunal in its own case, thus, in this case also the appellant should be allowed the refund benefit. Visa charges - Held that - the same is not eligible for refund inasmuch as such charges were incurred by the appellant for the family members of the employees, which cannot be termed as input service for the purpose of getting the refund benefit. Appeal allowed - decided partly in favor of appellant.

Summary

Issues:
1. Rejection of refund claim by the Commissioner (Appeals)
2. Nexus between input services and output service
3. Advertisement and sponsorship service utilization
4. Eligibility of cenvat refund for disputed services
5. Visa charges eligibility for refund

Analysis:
The appeal challenged the order passed by the Commissioner (Appeals) upholding the rejection of a refund claim related to service tax paid on input services for exportation of output service. The appellant's refund claim of Rs. 17,66,011/- was partially allowed by the Commissioner (Appeals) for Rs. 6,75,412/- but disallowed for Rs. 10,19,197/- due to lack of nexus between the input services and the exported output service. Specifically, the rejection was based on the utilization of advertisement and sponsorship services for promoting a brand that included units other than the appellant.

During the hearing, the appellant's counsel referred to previous judicial decisions, including a recent Tribunal decision in favor of the appellant, to support the eligibility of cenvat refund for the disputed services. Citing the Tribunal's order in a specific case, the counsel argued for granting the refund benefit to the appellant, similar to previous decisions.

In the judgment, Member (Judicial) S K Mohanty noted that since the Tribunal had already allowed the refund claim for similar disputed services in a previous case involving the appellant, the refund benefit should also be granted in the present case. However, the Member found that the visa charges amounting to Rs. 18,186/- were not eligible for refund as they were incurred for the family members of employees, which did not qualify as input services for refund purposes.

Consequently, the impugned order rejecting the refund claim was set aside, and the appeal was allowed, except for the refund of service tax related to visa charges. The decision partially allowed the appeal, providing relief to the appellant regarding the disputed services while excluding the visa charges from the refund eligibility.