2015 (12) TMI 216 - AT - Service Tax

Denial of refund claim - CENVAT Credit - adjustment towards payment of Service Tax/duty - Held that - After examining each service and the usage thereof and considered in the light of precedent decisions, in respect of these services, appellants have been able to show nexus and therefore refund is admissible. - As regards the refund claim prior to 14-3-2006 when the Notification was issued under Rule 5 of CENVAT Credit Rules, 2004 for sanction of refund of input services, the issue is covered by a decision in the Interim Order 2015 (3) TMI 346 - CESTAT BANGALORE . In view of the above, we find that the appellant is eligible for refund - Decided in favour of assessee.

Summary

Issues:
1. Refund claim under Rule 5 of CENVAT Credit Rules, 2004 for the period from January 2006 to March 2006.
2. Admissibility of credit and refund for services provided.
3. Nexus between input services and output services for refund eligibility.
4. Eligibility for refund claim prior to 14-3-2006.

Analysis:

1. The Appellant claimed a refund of &8377; 2,95,820/- under Rule 5 of CENVAT Credit Rules, 2004, for the period from January 2006 to March 2006, citing inability to utilize the CENVAT credit for Service Tax/duty payment. The refund claim was rejected based on various grounds.

2. The rejection of the claim was initially based on the argument that services provided were in the nature of information technology software service, which was exempt, making the credit and refund inadmissible. However, a previous order highlighted that a refund claim cannot be dismissed solely on the basis of the finished service being exempt.

3. The claim was further rejected on the premise that certain services lacked a nexus with the output services. After a detailed examination of services like clearing and forwarding agents, commercial training, consulting engineer, courier agency, and others, it was determined that the appellants were able to establish a nexus between these services and the output services, making them eligible for the refund.

4. Regarding the refund claim before 14-3-2006, when a Notification was issued for sanctioning refunds of input services, a previous decision provided clarity. The Tribunal found the appellant eligible for the refund, and the appeal was allowed with consequential relief. The operative part of the order was pronounced in open court.

In conclusion, the judgment addressed the various grounds on which the refund claim was initially rejected, emphasizing the importance of establishing a nexus between input and output services for refund eligibility. The decision provided clarity on admissibility criteria and highlighted the significance of previous orders in determining refund eligibility under the CENVAT Credit Rules, 2004.