2017 (1) TMI 1506 - AT - Service Tax

100% EOU - refund of CENVAT credit - input service - labour contract service - office maintenance - staff training expenses - subscription charges - insurance expenses - clearing charges - denial of refund on the ground of nexus - Held that - the disputed services involved in the present appeals fall in the definition of input service - in the appellant s own case Reitzel India Pvt Ltd. Versus Commissioner of Central Excise, Bangalore 2016 (6) TMI 1222 - CESTAT, BANGALORE , this Tribunal has already allowed the appellant s appeals by holding the disputed service as input service and therefore, the appellants are entitled to the refund of CENVAT credit under Rule 5 of the CCR, 2004 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection related to various expenses including labour contract service, office maintenance, staff training expenses, subscription charges, insurance expenses, and clearing charges.

Analysis:
The appellant, a 100% EOU engaged in manufacturing and exporting processed gherkins, filed refund claims of CENVAT credit for input services under Rule 5 of CENVAT Credit Rules, 2004. The original authority rejected the claims, stating they were not related to product manufacturing. The Commissioner (A) partially allowed the claims but rejected them concerning specific expenses. The appellant appealed this rejection, arguing that the impugned order did not consider the evidence on record or define input service per Rule 2(l) of CCR, 2004. The appellant highlighted that the rejected services were essential for business operations, citing the seasonal and labor-intensive nature of their business. They provided labor bills as evidence and referenced judicial precedents supporting their claim.

The appellant's counsel argued that the disputed services were considered input services in previous Tribunal and High Court decisions. They emphasized that a significant portion of the refund claims related to labor contract services, crucial for maintaining business operations during peak seasons and ensuring quality standards. The counsel provided copies of previous Tribunal orders supporting their case. Additionally, they noted that the Commissioner had previously dismissed a similar appeal involving identical input services in the appellant's case.

In response, the AR reiterated the findings of the impugned order, opposing the appellant's arguments. However, the Tribunal, after reviewing the submissions, previous decisions, and appellant's case history, concluded that the disputed services fell within the definition of input services. Citing previous Tribunal decisions that supported the appellant's claims, the Tribunal allowed all four appeals, granting the appellants the refund of CENVAT credit under Rule 5 of the CCR, 2004. The judgment was pronounced on 24/01/2017, providing consequential relief to the appellants.