2014 (12) TMI 498 - AT - Service Tax

Refund of the Service Tax - Cenvat credit - Input services - Held that - As regards the rejection of refund pertaining to Service Tax paid on group insurance policy, which also includes members of the family of the employee, the issue has already been settled in favour of the appellant in the cases of Micro Labs Ltd. 2011 (6) TMI 115 - KARNATAKA HIGH COURT and Stanzen Toyotetsu India (P) Ltd., cited 2008 (12) TMI 118 - CESTAT BANGLORE decided by the Hon ble High Court of Karnataka. Therefore, the appellant is rightly entitled to take credit of Service Tax paid on insurance premium on group insurance policy as the said service is an eligible input service and we hold accordingly. As regards the Service Tax paid on car parking rentals, the car parking is part of the business premises of the appellant and is a business expenditure. Therefore, it is an eligible input service as defined in Rule 2(l) of the Cenvat Credit Rules, 2004. The Hon ble High Court of Bombay in the case of Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT held that any input service which has a nexus with the business of manufacture or relating to business would get covered under the term input service under Rule 2(l) of the Cenvat Credit Rules and accordingly Cenvat credit on such services would be available. In view of the above we are of the considered view that service tax paid on car parking rentals is an eligible input service under Rule 2(l) of the Cenvat Credit Rules and consequently the appellant would be eligible for refund of the same under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 5/2006-S.T., dated 14-3-2006. As regards the credit relating to services for which the input invoices were not produced, the appellant is directed to submit the same before the adjudicating authority to consider their eligibility to the credit and the consequential refund in accordance with law - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Refund of Service Tax on input services under Cenvat Credit Rules, 2004.

Analysis:
The case involved two appeals arising from a common order passed by the Commissioner of Central Excise, Pune-III, concerning the refund claims made by M/s. PTC Software (India) Pvt. Ltd. The appellant, engaged in providing Information Technology Software Services and Business Support Services, filed refund claims for specific amounts, citing their continuous engagement in exports and inability to utilize Cenvat credit on input services for exported output services. The original authority rejected parts of the refund claims, leading to an appeal by the appellant, which was dismissed by the lower appellate authority, prompting the appeal before the Appellate Tribunal.

The appellant's counsel argued against the rejection grounds, including issues related to insurance services, car parking services, lack of supporting invoices, and registration status of service providers. Regarding insurance premiums for family members of employees, the appellant contended that group insurance is a standard employment benefit, eligible for Cenvat credit based on relevant legal precedents. Similarly, the appellant justified the inclusion of car parking rental expenses as eligible input services integral to their business operations. They also assured the availability of required invoices for verification.

The Revenue's representative reiterated the lower authorities' findings, leading to a detailed consideration by the Tribunal. The Tribunal upheld the appellant's entitlement to Cenvat credit on insurance premiums, including coverage for family members, based on legal precedents favoring such claims. Additionally, the Tribunal deemed car parking rentals as eligible input services, aligning with the business nexus criterion under the Cenvat Credit Rules. The Tribunal directed the appellant to submit missing input service invoices for further verification and consideration by the adjudicating authority.

Conclusively, the Tribunal allowed the appeals by remanding the matter to the adjudicating authority for a fresh consideration of the appellant's refund claims, emphasizing compliance with legal provisions and precedents. The detailed analysis addressed each rejection ground, ensuring a fair and comprehensive review of the appellant's refund eligibility under the Cenvat Credit Rules, 2004.