2011 (9) TMI 443 - AT - Service Tax

Refund under Rule 5 - Cenvat Credit - Held that - The finding of the Commissioner in respect of three services namely Air Travel Agents Services, Event Management Services and Design Services that they are not essential for the output services rendered by the respondent are categorical. The respondent is not in appeal. However in respect of other services, the finding of the Commissioner is not categorical. Therefore, his remitting the matter to the original authority is in the nature of remand which is not proper - Commissioner (Appeals) has no power of remand (2007 - TMI - 1196 - SUPREME COURT OF INDIA) - However the re-examination of the claim in respect of other services deserves to be done by the original authority in the light of guidelines prescribed by Board s Circular dated 19.01.2010. In view of the above, the order of the Commissioner (Appeals) in so far as the same relates to services other than Air Travel Agents services, Event Management Services and Design services are set aside and the matter remanded to the original authority for fresh consideration

Summary

Issues:
1. Refund claim rejection under Rule 5 of Cenvat Credit Rules, 2004.
2. Admissibility of refund for specific services.
3. Power of remand by Commissioner (Appeals).
4. Validity of chartered accountant certificate for establishing nexus.
5. Consistency in treatment of input services for cenvat credit and refund purposes.

Analysis:
1. The appeal pertains to the rejection of a refund claim under Rule 5 of the Cenvat Credit Rules, 2004 for unutilized Cenvat credit from January to March 2008. The original authority denied the refund claim, leading to an appeal by the party.

2. The Commissioner (Appeals) differentiated between various services, ruling that certain services like Air Travel Agents Service, Event Management Service, and Design services were not essential for the output services provided by the respondent. However, for other services, the Commissioner remanded the matter to the original authority for further consideration based on the nexus between input and output services.

3. The judgment addressed the issue of the Commissioner's power of remand. The learned JCDR argued against the remand, citing a Supreme Court judgment (MIL India Ltd. case) and challenging the use of a chartered accountant certificate to establish nexus.

4. The advocate for the appellant relied on a Board's Circular to argue that a consistent approach should be followed for treating services as input services for cenvat credit and refund purposes. He contended that the Commissioner's order was primarily for re-quantification based on the chartered accountant certificate.

5. The Tribunal found that while certain services were deemed non-essential by the Commissioner, a clear decision was lacking for other services. The Tribunal set aside the Commissioner's order regarding services other than Air Travel Agents, Event Management, and Design services, remanding the matter to the original authority for reconsideration based on the guidelines in the Board's Circular and the chartered accountant certificate.

6. Ultimately, the appeal was allowed by way of remand, and the stay petition was disposed of, emphasizing the need for a fresh consideration by the original authority in line with the prescribed guidelines and after granting a reasonable opportunity for the respondent/assessee to present the chartered accountant certificate.