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2011 (12) TMI 138 - AT - Service TaxPower of the Commissioner (Appeals) to remand - export of IT software - refund claim under Rule 5 of CENVAT Credit Rules 2004 read with Notification No. 5/2006 dated 14.3.2006 on input services used in the export of output services Held that - The Commissioner (Appeals) has examined and found nexus between the input services (viz manpower recruitment, commercial training, management consultancy etc) and the output services. In effect, the Commissioner (Appeals) has not remitted any issue on merits to be decided by the original authority. It is basically for quantification purposes based on the Chartered Accountant s certificate as envisaged in the Board s Circular dated 19.1.2010. - Decided against the Revenue.
Issues:
1. Condonation of delay in filing the appeal. 2. Stay petition filed by the department. 3. Rejection of refund claim under CENVAT Credit Rules 2004. Condonation of Delay: The judge considered the application for condonation of delay in filing the appeal and granted a condonation of 29 days after reviewing the grounds presented by the appellant. Stay Petition: The department filed a stay petition which was declined by the judge considering the nature of the dispute. The judge decided not to stay the operation of the impugned order and proceeded with the final disposal of the appeal. Rejection of Refund Claim: The respondent-assessee exported IT software services and filed a refund claim under CENVAT Credit Rules 2004. The original authority rejected the claim stating that the services availed did not have a nexus with the output service exported. However, the Commissioner (Appeals) set aside the original authority's order, leading to the department appealing the decision. Contentions and Analysis: The department argued that the Commissioner (Appeals) did not have the power of remand and requested the order to be set aside for fresh consideration. The department relied on legal precedents to support its stance. The judge carefully examined the submissions and records, noting that the disputed services had been thoroughly analyzed by the Commissioner (Appeals) in terms of their nexus with the output services. The judge detailed the findings related to various services like Manpower Recruitment, Commercial Training, Security Agency, Business Support, Chartered Accountant, Management Consultancy, Customs House Agent, Outdoor Catering, Rent a Cab, Maintenance Services, and Renting of Immovable Property. The judge emphasized the essential nature of these services for the provision of output services by the assessee. The Commissioner (Appeals) had not remitted any issue on merits for the original authority to decide, primarily focusing on quantification based on relevant guidelines. The judge found the department's argument regarding the lack of power of remand by the Commissioner (Appeals) irrelevant in this context. As no valid grounds were presented to challenge the Commissioner (Appeals)'s order, the appeal of the department was rejected, along with the stay petition and the application for condonation of delay. In conclusion, the judgment upheld the decision of the Commissioner (Appeals) regarding the refund claim under CENVAT Credit Rules 2004, emphasizing the essential nexus between the input services and the output services exported by the assessee. The judgment provided a detailed analysis of the services in question and clarified the role of the Commissioner (Appeals) in the context of remand and quantification aspects of the refund claim.
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