2014 (7) TMI 156 - AT - Service Tax

Denial of refund claim - Various taxable services - Nexus with input services - Held that - Commissioner (Appeals) has disallowed the refund of service tax namely Rent-a-cab service, Telephone service, Maintenance charges, Renting of premises, Consultancy, Food Pass, Software, AMC charges, Data Card. Video Conferences, Outsourcing, Housekeeping, Courier, Ancedent charges, Foreign outsourcing, Profession charges, Web conference and vendor charges on the ground that these activities are not relating to business. I find that the Tribunal by 2014 (5) TMI 541 - CESTAT CHENNAI , in the appellant s own case, dismissed the Revenue s appeals on the ground that Revenue has not placed any material to prove that the above services were not used in relation to output service. In the said order, the Commissioner (Appeals) discussed the use of the services item-wise elaborately. In the present case, the Commissioner (Appeals) merely mentioned the name of the services and observed that the same cannot be stretched to portray as an activity relating to business. In my considered view, the Commissioner (Appeals) cannot disallow the refund claim of the same service without discussing in detail use of services item-wise. The learned consultant on behalf of the appellant submits that they have mentioned the use of the activities item-wise in their refund claim application. Hence, it is appropriate that the Commissioner (Appeals) should examine the use of the services on each of the items before deciding the case. - Matter remanded back - Decided in favour of assessee.

Summary

Issues involved: Refund claims under Rule 5 of CENVAT Credit Rules, 2004, export of service, disallowance of refund of service tax on various services by the Commissioner (Appeals).

Analysis:

1. Refund Claims under Rule 5 of CENVAT Credit Rules, 2004:
The appellants, engaged in providing pre-publishing services, filed refund claims under Rule 5 of CENVAT Credit Rules, 2004 for the input service credit utilized in rendering export of service. The adjudicating authority sanctioned the refund claims partially, which led to appeals before the Commissioner (Appeals). The Commissioner (Appeals) allowed refund on certain services but disallowed on others, citing that they were not related to business activities. The Tribunal in the appellant's own case had dismissed Revenue's appeals for lack of material proving non-use of services in relation to output service. The Commissioner (Appeals) in the present case did not discuss the use of services item-wise, leading to the decision being set aside for a detailed examination.

2. Export of Service and Disallowance of Refund:
The Commissioner (Appeals) disallowed the refund of service tax on various services like Rent-a-cab, Telephone service, Maintenance charges, etc., stating they were not business-related activities. However, the Tribunal's previous order in the appellant's case highlighted the necessity of proving non-use of services in relation to output service. The Commissioner (Appeals) failed to provide a detailed analysis of the use of services item-wise, which led to the decision being remanded for a fresh consideration. The appellants were directed to present detailed information on the use of services item-wise during the rehearing, emphasizing the importance of a proper opportunity for hearing before a final decision.

3. Remand and Direction to Commissioner (Appeals):
In light of the above discussions, the Tribunal set aside the impugned orders regarding the rejection of refund on certain services and remanded the matters to the Commissioner (Appeals) for a fresh decision after a thorough examination of the use of services on each item. The appellants were instructed to provide detailed information during the hearing, and it was emphasized that the Commissioner (Appeals) must ensure a proper opportunity for hearing before issuing a new order. All appeals were allowed by way of remand, and the stay applications were disposed of accordingly.

This detailed analysis of the judgment highlights the issues surrounding refund claims, export of service, and the disallowance of refund by the Commissioner (Appeals), emphasizing the need for a comprehensive examination of the use of services item-wise before making a decision.