2015 (7) TMI 221 - AT - Service Tax

Refund of accumulated Cenvat credit - documents are not in the name of the appellant - no nexus between input services and the final product - distribution of credit by the ISD - held that - In the impugned orders other than saying that bills are not in the name of the appellant, there is no other observation at all. It is not even possible to conclude that documents are not in the name of the appellant in view of the clear finding that refund claim was not defective but had all the requirements fulfilled. In such a scenario, the observations that the bills are not in the name of the unit is not supported by facts. The appellant has taken credit on the basis of invoices issued by Input Service Distributor and on going through one of the invoices I find that the invoice appears to fulfill the requirement of the law. The bills give name of the Input Service Distributor, address and the details of credit passed on with the details of service providers and the credit in the annexure. In the absence of any consideration whatsoever other than a bland observation that bills are not in the name of the unit and in view of the submission that very same documents were used by the appellant for taking credit the obvious conclusion is that appellant has taken credit on the basis of invoices issued by ISD and therefore what is required to be examined while considering the refund claim was correctness of the ISD invoice whether it had the required details or not. - expenses like bank charges, CA services, CHA services, Cargo Services etc are required and can be considered in or in relation to manufacture and clearance of final products unless the contrary is proved which is not the case here. Under the circumstances, the matter in any case has to be remanded since the refund claim has to be considered afresh. - Decided in favour of assessee.

Summary

Issues:
Refund of accumulated Cenvat credit rejected due to documents not in appellant's name and lack of nexus between input services and final product.

Analysis:
The appellant's refund claim of accumulated Cenvat credit was denied on two grounds: documents not in the appellant's name and lack of nexus between input services and the final product. The appellant argued that bills were received by their Head Office and credit was distributed, and expenses like bank charges, CA service, Clearing and Forwarding service, and CHA service were utilized in relation to the manufacture and clearance of final products. The AR supported the impugned orders.

The Tribunal considered the definition of 'input services' as any services used directly or indirectly in relation to the manufacture and clearance of final products. It was noted that expenses like bank charges, clearing and forwarding, CHA service, and commission paid to agents are essential for the clearance of goods. The Tribunal highlighted that the documents on which credit was taken were not found to be unproduced, and the issue was about the admissibility of credit and documents not being in the appellant's name. The Tribunal found that the denial of credit and refund based on bills not being in the unit's name was not supported by facts, as the appellant had taken credit based on invoices issued by Input Service Distributor, fulfilling legal requirements.

The Tribunal directed a remand for the refund claim to be considered afresh, emphasizing the examination of the correctness of the ISD invoice and the appellant's production of evidence regarding expenses incurred and services received related to the final product. The original authority was instructed to consider the refund claim based on the evidence provided and applicable precedent decisions. Any denial of refund claim should be clearly reasoned and explained in accordance with the law.

In conclusion, the Tribunal ordered a remand for a fresh consideration of the refund claim, focusing on the correctness of the ISD invoice and the relationship between expenses/services and the final product. The decision highlighted the importance of providing detailed reasoning for any denial of refund claim and adherence to legal provisions.