2015 (3) TMI 1308 - AT - Service Tax

Refund claim - input services - denial on the ground of nexus - Held that - Since all the input services have already been considered and have been held to be having nexus with output services by this Tribunal itself, in the present case also the appeal filed by the Revenue cannot succeed - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Refund claim of service tax paid on input services under Rule 5 of CENVAT Credit Rules 2004; Rejection of refund claim by original authority; Partial allowance of refund by Commissioner (Appeals); Appeal by Revenue challenging the nexus between input services and output service.

Analysis:
The appellant, engaged in export of services, filed a refund claim for service tax paid on various input services under Rule 5 of CENVAT Credit Rules 2004. The original authority rejected the entire refund claim, leading to an appeal by the assessee. The Commissioner (Appeals) partially allowed a refund of &8377; 20,46,591 out of &8377; 23,80,311 claimed. The Revenue appealed this decision, arguing that the Commissioner did not adequately examine the nexus between input services and output service. Despite a brief examination in paragraph 6 of the order, the Revenue contended that there was no detailed discussion on the nature of the input services and their utilization for providing output services, which formed the basis of their grievance.

The appellant's Chartered Accountant argued that the same input services previously considered by the Tribunal had been allowed for refund in a prior order. The only additional service not covered in the previous order was the renting of immovable property service, which was used as office premises for service provision. The Chartered Accountant emphasized that there was a clear nexus between the immovable property service and the output services. The Tribunal agreed with this submission, noting that all input services had been previously deemed to have a nexus with output services by the Tribunal. Consequently, the Revenue's appeal was rejected, affirming the nexus between input and output services as established in previous decisions.

In conclusion, the Tribunal upheld the nexus between input services and output services, dismissing the Revenue's appeal against the partial refund allowed by the Commissioner (Appeals). The decision was based on the precedent set by previous Tribunal orders and the clear connection between the immovable property service and the provision of output services by the appellant.