2014 (6) TMI 658 - AT - Service Tax

CENVAT credit - export of services - credit has been denied on the ground that original authority thought that the output services were not at all taxable and therefore input service credits could not have been taken at all - Held that - the detailed submissions made in respect of different services rendered by the respondents/assessee have not been discussed in detail at all. Even where there has been discussion, the discussions are not sufficient and mostly general in nature. - matter remanded back for reconsideration. Classification of output services - According to Revenue output service was classifiable under Information Technology Service (ITS) whereas it is claimed by the respondents that such services are classifiable under Business Support Service (BSS) or Business Auxiliary Service (BAS). - Held that - Since the refund claims had been rejected on the ground that output services were a non-taxable service and the eligibility for the credit had not been examined, this aspect also will have to be considered in detail by the original adjudicating authority. It was also requested by both the sides that some general guidelines should be laid down by this Tribunal while remanding the matter. Scope of business auxiliary services - scope of the term 'include' - Held that - the word includes has not been used to expand the definition of support service of business or commerce . This is because the meaning itself is very broad and therefore it may not be correct to say that the word includes as in the normal cases expands the definition here. If the meaning given for support service of business or commerce is taken as very broad and if there was no intention to restrict the same, it would have been sufficient to say that support service of business or commerce means services provided in relation to business or commerce. While coming to the conclusion we take note of the fact that on 8.4.2011 the operational processes for marketing was added by Finance Act, 2011 and if the meaning was to cover almost all services, there was no need to add to the definition subsequently. In fact, the explanation given below in the definition explaining what is infrastructural support service would also support the view that in all types of services provided in relation to business or commerce can be considered as support service of business or commerce may not be correct. - it would be necessary for the original adjudicating authority to consider each service rendered by the assessees herein as to whether they fall under ITS or BAS or BSS or any other service which appellant may choose to make a claim at the time of fresh adjudication. - matter remanded baci - Decided partly in favour of Revenue.

Summary

Issues involved: Accumulated CENVAT credit in respect of input services utilized for exported output services, classification of output services under different categories, examination of eligibility of input services under CENVAT Credit Rules, detailed examination of services rendered by the assessee, classification of output services under Business Support Service (BSS) and Business Auxiliary Service (BAS), setting general guidelines for remanding matters, interpretation of 'support services of business or commerce' for classification purposes, time limit for completing adjudication process.

Analysis:
1. Accumulated CENVAT Credit: The issue in all appeals is the denial of CENVAT credit on input services used for exported output services. The original authority denied the credit, stating the output services were not taxable, hence no credit could be taken. After hearing both sides, it was concluded that the matters needed to be remanded to the original authority. The respondents are allowed to make fresh claims regarding the classification of output services.

2. Classification of Output Services: The classification of output services under different categories like Information Technology Service (ITS), Business Support Service (BSS), or Business Auxiliary Service (BAS) is disputed. The original authority did not examine the eligibility of input services under CENVAT Credit Rules. The matter is remanded back to the original authority to reexamine the classification claims of output services and input services in detail.

3. Detailed Examination of Services: The Tribunal found that detailed submissions on services rendered were not adequately discussed. The respondents are required to submit details afresh for each type of service, along with classification and amount involved. The original authority must consider these submissions in light of legal provisions, judicial decisions, and circulars. Any rejected refund claims due to non-taxable output services must be reconsidered alongside the classification of services.

4. Setting Guidelines for Remanding Matters: Both parties requested general guidelines for remanding matters. The Tribunal agrees and emphasizes the need for a thorough examination of services rendered by the assessee for proper classification under BAS or BSS. The original authority is directed to consider each service provided and determine the appropriate classification.

5. Interpretation of 'Support Services of Business or Commerce': The definition of 'support services of business or commerce' is analyzed to determine the scope of services covered under BAS and BSS. The Tribunal agrees that the definition is broad and should be interpreted restrictively. The original authority is instructed to carefully assess each service to ascertain its classification accurately.

6. Time Limit for Adjudication Process: To expedite the adjudication process, a specific time limit of three months is set for the original adjudicating authority to complete the process after receiving all details from the respondents. If the data provided is insufficient, the authority must request rectification within 15 days. All previous orders are set aside, and matters are remanded for fresh decisions.

In conclusion, the appeals are disposed of by remanding them to the original adjudicating authority for a detailed reexamination of the issues discussed, including the classification of services and the eligibility of CENVAT credit on input services. The Tribunal emphasizes the need for a thorough analysis and adherence to the set time limits for completing the adjudication process.