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2018 (7) TMI 1838 - AT - Service TaxRefund of Unutilized CENVAT Credit - case of appellant is that the output services provided during the impugned period had been exported and that therefore, they were unable to utilize the CENVAT Credit - denial of refund on the ground of nexus - Held that - The undisputed fact is that the Air Travel Agents Service was used mainly for the employees of the appellant to travel for the appellant s business purposes, which has a direct nexus between the input services and the services exported by the appellant since such travels were made by the employees on projects, assignments, etc., undertaken by the appellant for its business purposes - Refund allowed - appeal allowed - decided in favor of appellant.
Issues:
Refund claim under Rule 5 of CCR, 2004 for unutilized Cenvat Credit due to exported output services. Disallowance of refund claim for Air Travel Services under amended Rule 2(l) of CCR, 2004. Appeal against the disallowance decision by Commissioner (Appeals). Issue 1: Refund Claim under Rule 5 of CCR, 2004 The appellant, registered under Business Support Service (BSS) and other categories, sought a refund of &8377; 32,44,738/- under Rule 5 of the Cenvat Credit Rules, 2004. The claim was based on the inability to utilize Cenvat Credit on input services due to exporting output services. The adjudicating authority partially allowed the refund, excluding &8377; 89,344/- related to Air Travel Services deemed ineligible under amended Rule 2(l) of CCR, 2004. The appellant contested this decision through an appeal. Issue 2: Disallowance of Refund for Air Travel Services The Commissioner (Appeals) upheld the disallowance of the refund concerning Air Travel Services, relying on precedents like ADC INDIA COMMUNICATIONS LTD. and PARASON MACHINERY (I) PVT. LTD. The appellant challenged this decision before the forum, arguing that the Commissioner failed to consider crucial evidence supporting the refund claim, distinct from the cases cited. Detailed Analysis: The appellant's representative contended that the Commissioner (Appeals) erred in dismissing the refund claim without adequately considering the appellant's submissions and supporting documentation. The appellant's position emphasized the significance of the evidence provided, which was purportedly distinct from the cases referenced by the Commissioner. On the contrary, the Department Representative supported the lower authorities' decisions. The Member (Judicial) observed that the issue at hand had been settled by previous court decisions. Notably, the Air Travel Agents Service, utilized for the appellant's employees on business-related travel, was deemed to have a direct connection to the exported services. This nexus between input services and exported services was crucial, as the employee travels were linked to the appellant's business activities. The Member cited various precedents, including Heartland Bangalore Transcription Ser. (P) Ltd. and Robert Bosch Engg. & Business Solutions Ltd., to support this interpretation. In conclusion, the Member (Judicial) overturned the impugned order, allowing the appeal and granting consequential reliefs to the appellant. The decision, pronounced on 13.07.2018, highlighted the direct relationship between the input services, specifically Air Travel Services, and the exported services, leading to the approval of the refund claim under Rule 5 of CCR, 2004.
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