2014 (2) TMI 1044 - AT - Service Tax

Refund of CENVAT Credit - eligibility of input service credit taken on lift maintenance or air-conditioner, renting of cafeteria area, sale of foreign currency, AMC to air-conditioning - Held that - denial of credit on air-conditioner, renting of cafeteria areas, AMC to air-conditioner are not sustainable. - Decision in the case of assessee s own case 2013 (12) TMI 741 - CESTAT CHENNAI followed. The respondent is an 100% EOU with the Software Technology Park of India and during the course of business some of the employees were required to travel outside India to the patent company for knowledge transfer relating to the business. It is also noted that the lift maintenance is related to their office premises. - all these activities are covered within the definition of input services under Rules 2004 - Decided against the revenue.

Summary

Issues involved: Application for rectification of mistake in Stay Order and Final Order regarding entitlement to refund of service tax prior to registration and eligibility of input service credit.

Analysis:
1. Entitlement to refund of service tax prior to registration: The Revenue filed an application for rectification of mistake in the Stay Order and Final Order, raising the issue of whether the respondents are entitled to a refund of service tax prior to registration with the Service Tax Department. The learned AR for Revenue argued that the first issue had already been decided by the Tribunal in the final order. However, the other issue regarding the eligibility of input service credit was not addressed in the Final Order. The learned counsel for the respondent contended that since the other issue had been considered in the respondent's own case, there was no mistake in the Final Order. The Tribunal found that as the other issue had not been decided in the Final Order, it was appropriate to consider it based on the Revenue's appeal.

2. Eligibility of input service credit: The Revenue raised concerns about the eligibility of input service credit for lift maintenance, air-conditioner services, renting of cafeteria areas, sale of foreign currency, and AMC to air-conditioning. The Tribunal noted that in the respondent's case, the Single Member had already allowed credit for air-conditioner, renting of cafeteria areas, and AMC to air-conditioner in a previous Final Order. The Tribunal referred to the Single Member's decision, highlighting that services such as renting cafeteria areas and AMC for air-conditioner were considered input services. The Tribunal agreed with the earlier finding that the denial of credit on these services was not sustainable. Regarding the sale of foreign currency, the Tribunal held that activities related to knowledge transfer and lift maintenance were covered within the definition of input services under the CENVAT Credit Rules, 2004. Therefore, the appeal filed by the Revenue on this issue was deemed unsustainable.

3. Final Decision: The Tribunal allowed the application filed by the Revenue for rectification of mistake, directing that the observations on the eligibility of input service credit should be read as part of the Stay Order and Final Order. The Tribunal concluded that the denial of credit on certain services was not sustainable based on the interpretation of input services under the relevant rules.