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2015 (9) TMI 1570 - AT - Service Tax


Issues:
Refund of service tax paid on disputed services under Rule 5 of Cenvat Credit Rules, 2004.

Analysis:
The case involves an export-oriented unit engaged in manufacturing medical products seeking a refund of service tax paid on various services procured for manufacturing the exported goods. The original authority rejected the refund application citing that the disputed services did not conform to the definition of 'Input Service' under Rule 2(l) of the Cenvat Credit Rules, 2004, and lacked a nexus with the manufactured goods. However, the Commissioner (Appeals) allowed the appeal, stating that the disputed services did meet the criteria of input services and were connected to the pharmaceutical products' production. This led to the Revenue appealing before the Tribunal.

The ld. D.R. for the appellant reiterated the grounds of appeal, emphasizing the original authority's decision. On the contrary, the ld. Advocate for the respondent argued that the disputed services were linked to the Pharmaceutical Products manufactured and met the definition of input services under Rule 2(l) of the Cenvat Credit Rules, 2004. To support her argument, the ld. Advocate presented a detailed chart showcasing the correlation of input services for specific periods, highlighting the importance and relevance of each service in the manufacturing process.

Upon reviewing the presented chart and arguments, the Tribunal found that the disputed services indeed fell within the definition of 'input service' and had established a nexus, either directly or indirectly, with the manufacturing of the final products by the respondent. Consequently, the Tribunal concluded that the respondent was eligible for a refund of the service tax paid on the disputed services as per Rule 5 of the Cenvat Credit Rules, 2004. The Tribunal upheld the Commissioner (Appeals)' decision, dismissing the appeals filed by the Revenue.

In summary, the judgment revolved around the eligibility of an export-oriented unit for a refund of service tax paid on services used in manufacturing medical products for export. The Tribunal's decision was based on the determination that the disputed services met the criteria of 'input service' and were connected to the production of the final goods, warranting the refund under Rule 5 of the Cenvat Credit Rules, 2004.

 

 

 

 

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