2012 (7) TMI 632 - AT - Service Tax

Refund of unutilized CENVAT credit on input services - partial refund to the claimant - Held that - Commissioner (Appeals) passed order directing the original authority to refund CENVAT credit on the input services in question subject to production of Chartered Accountant s certificate as per the Board s Circular dated 19.1.2010 - the order passed by the Commissioner (Appeals) can hardly be said to be remand order.

Summary

Issues:
1. Stay applications filed by the department seeking stay of operation of the impugned orders.
2. Refund of unutilized CENVAT credit on input services for export of output services.
3. Appeal against Order-in-Original to the Commissioner (Appeals) and subsequent decisions.
4. Power of remand by the appellate authority in the case of M/s Cibersites India Pvt. Ltd.

Analysis:
1. The judgment by the Appellate Tribunal CESTAT, Bangalore involved stay applications filed by the department seeking to stay the operation of impugned orders. The Tribunal decided to dispose of the appeals finally at that stage after rejecting the stay applications. This decision allowed the appeals to be taken up for further consideration.

2. The respondents in the appeals had claimed a refund of unutilized CENVAT credit on input services used for exporting output services. The original authority allowed partial refunds after establishing a nexus between some input services and corresponding output services. However, for remaining input services, no such nexus was found, leading to denial of CENVAT credit refund.

3. Appeals were made to the Commissioner (Appeals) against the adverse parts of the Order-in-Original. In the case of M/s Nuware Systems Pvt. Ltd., the appellate authority set aside the Order-in-Original and allowed the refund subject to specific conditions. The party collected the refund as per the appellate Commissioner's decision, rendering the Revenue's appeal infructuous.

4. In the case of M/s Cibersites India Pvt. Ltd., the appellate Commissioner's order directed the original authority to refund CENVAT credit on input services subject to conditions. The department's appeal against this order raised concerns about the power of remand. The Tribunal found that the Commissioner (Appeals) had decided the substantive issue, and the matter was sent back for re-quantification of refund, not as a remand. The Tribunal dismissed the department's appeal as the objection raised was deemed untenable.

5. The judgment clarified that the orders passed by the appellate authority were not remand orders but decisions on the substantive issue, directing re-quantification of refund based on specific conditions. The appeals by the department were dismissed, and the stay applications were also rejected in each case.