2016 (11) TMI 1438 - AT - Service Tax

100% EOU - Refund claim - input services - Shipping Services - Insurance Services - rejection also on the ground of time limitation - Held that - the amount of ₹ 2,15,319/- claimed as refund for the month of September, 2008 was hit by limitation of time - there is no infirmity with regard to this effect in the impugned order. With regard to the refund of cenvat credit of Shipping Services, I feel that there is no infirmity in the impugned order as the same does not fall in the definition of input services . Insurance Services - Held that - the same are neither connected with the manufacturing activity nor included in the input service definition because the service is used to ensure the manufactured goods till the port or till the destination as per the terms agreed with the buyer of the goods and the appellant has not been able to produce what are the terms with the buyer - there is nothing wrong in the findings returned in the impugned order. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Refund claim rejection based on limitation period.
2. Eligibility of Cenvat credit on specific services.
3. Definition of 'input services' under Cenvat Credit Rules, 2004.
4. Appeal against rejection of refund claim for Shipping and Insurance Services.

Analysis:
1. The appeal was filed against the Commissioner (Appeals) order allowing Cenvat credit for certain services but rejecting it for Shipping and Insurance Services, along with a refund claim for the quarter ending September, 2008 due to limitation. The appellant, a manufacturer and exporter, sought a refund of &8377; 20,18,039/- under Rule 5 of Cenvat Credit Rules. The Assistant Commissioner rejected a portion of the claim for being filed after one year from export. The Commissioner upheld the rejection for the same reason but allowed the credit for specific services like Security, Fumigation, Labour, Goods Transport, Business Auxiliary, and Freight Services, while disallowing it for Shipping and Insurance Services.

2. The Tribunal noted that the claim of &8377; 2,15,319/- for September, 2008 was rightfully rejected due to exceeding the time limit. The Cenvat credit for Shipping Services was also correctly denied as it did not qualify as an 'input service'. The appellant's argument for Insurance Services as 'input service' was refuted by the Commissioner, stating that it was not related to manufacturing activity and lacked evidence of agreement terms with buyers. The Tribunal concurred with the Commissioner's findings, leading to the appellant withdrawing the claim during arguments.

3. The Commissioner's decision to reject the refund claim for Insurance Services was upheld by the Tribunal, emphasizing that the services did not meet the 'input service' criteria. The appellant's failure to demonstrate the connection of Insurance Services to manufacturing activities or buyer agreements led to the dismissal of the claim. The Tribunal found no fault in the Commissioner's order and concluded that the appeal lacked merit, thereby disposing of it accordingly.

In conclusion, the Tribunal upheld the rejection of the refund claim based on the limitation period and the ineligibility of Shipping and Insurance Services as 'input services'. The Commissioner's decision was supported regarding the denial of the claim for Insurance Services due to the lack of evidence linking them to manufacturing activities or buyer agreements. The appeal was deemed meritless and disposed of accordingly.