2017 (9) TMI 1818 - AT - Central Excise

Refund of service tax - Input services - Business Auxiliary Service - denial on the ground of nexus with output services - HELD THAT - On perusal of the definition and the nature of the disputed services, it reveals that none of the services mentioned therein are falling under the excluded category, as per such definition. Thus, usage of the disputed service for ultimate exportation of taxable service, having been not disputed by the Department, denial of Cenvat benefit, is not proper and justified. Incorrect mention of address - HELD THAT - The address mentioned in the invoices is the same as mentioned in the service tax registration certificate. Thus, rejection of refund on such ground is not sustainable. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of refund claim under Rule 5 of Cenvat Credit Rules, 2004 for various taxable services.

Analysis:
The dispute in this case revolves around the denial of a refund claim for taxable services under Rule 5 of the Cenvat Credit Rules, 2004. The authorities rejected the refund claim for services such as fee paid to a Chartered Accountant firm, fee for mapping of supplier & consumer of Sulphuric Acid, fee paid to STPI for registration, commercial general liability insurance, fee for arranging lease of office space, cleaning of office, and business promotion. The reasons for rejection varied from services not being used for output service to issues with address details on invoices.

Upon hearing both sides and examining the case records, the Tribunal found that the appellant did not contest the refund claim for Business Auxiliary Service amounting to ?13,732 as it was not used for output service. Consequently, the Tribunal upheld the denial of refund for this specific service. However, the Tribunal noted that services like Chartered Accountants service, management Consultant, and other taxable services were utilized by the appellant for exporting its output service. The definition of 'input service' under Rule 2(l) of the Cenvat Credit Rules, 2004 was crucial in this analysis. The rule stipulates that any service used by a provider of output service for providing an output service should be considered as an input service for availing Cenvat Credit. Since the disputed services did not fall under the excluded category as per the definition, and their usage for exporting taxable services was undisputed, the denial of Cenvat benefit was deemed improper and unjustified.

Moreover, the Tribunal addressed the issue of incorrect address details on invoices. It was found that the address mentioned in the invoices matched the one in the service tax registration certificate, rendering the rejection of refund on such grounds unsustainable. Consequently, the Tribunal concluded that, except for the Business Auxiliary Service, the impugned order rejecting the refund claim under Rule 5 of the Cenvat Credit Rules lacked merit. Therefore, the refund application for services listed at Serial No. 1 to 6 in the table was allowed in favor of the appellant. The judgment was dictated and pronounced in the Open Court.