2015 (11) TMI 344 - AT - Service Tax

Denial of refund claim - accumulated CENVAT credit - input services claimed to have been utilised for export - Held that - Input services have been excluded post 01/04/2011 from the definition of input service given in Rule 2(l) of CENVAT Credit Rules 2004. However the period involved here is prior to 01/04/2011, that is why this exclusion will not be applicable to the appellant s case. - rule in sub-clause (ii) clearly says that the input service which are used directly or indirectly, in or in relation to the final products and clearance of final products upto the place of removal of the manufacturer / service provider would be covered within the definition of Input Service . This Rule 2(l) has given inclusions where services used in relation to the modernization, renovation or repairs of a factory, premises of provider of ouput service or an office relating to such factory or premises, advertisement or sales promotion, market research and so on. - definition of input service is wide and the input services in question (the appellant here has not pleaded relief in respect of Banking and Other Financial Service & Design Service) would be covered for relief i.e. refund of accumulated input service credit in terms of Rule 5 of CENVAT Credit Rules, 2004 to the appellant. - Decided partly in favour of assessee.

Summary

Issues:
Rejection of refund of accumulated CENVAT credit for various input services claimed for export during July 2008 to September 2008.

Analysis:
1. The appellant claimed refund for 17 services, including Banking and Other Financial Services and Design Services. The learned CA withdrew the claim for these two services due to uncertainty about their nexus with export services.
2. The remaining services claimed for refund included Air travel, Chartered Accountant's service, Clearing and Forwarding Services, Commercial Training and Coaching Services, and others.
3. The period involved predates the exclusion of certain input services from the definition under Rule 2(l) of CENVAT Credit Rules 2004, making the exclusion inapplicable to the appellant's case.
4. The Order-in-Original rejected the refund, stating that nexus was not proven for the input services mentioned.
5. The definition of "input service" under Rule 2(l) covers services used directly or indirectly in relation to final products or clearance, including activities like modernization, renovation, repairs, advertisement, market research, and more.
6. Referring to a decision by CESTAT, Ahmedabad, the judgment emphasized that input services related to business activities are wide-ranging and should be considered for refund under Rule 5 of CENVAT Credit Rules, 2004.
7. The Tribunal partially allowed the appeal, granting relief to the appellant for the input services claimed, excluding Banking and Other Financial Services and Design Services, based on the broad interpretation of the definition of input services and their relevance to business activities.

This detailed analysis of the judgment highlights the issues, arguments presented, legal interpretations, and the final decision rendered by the Appellate Tribunal CESTAT BANGALORE regarding the rejection of refund of accumulated CENVAT credit for various input services utilized for export during the specified period.