2018 (10) TMI 1760 - AT - Service Tax

Refund of accumulated CENVAT Credit - service provided outside India - input services - Manpower Recruitment or Supply Agency Services - Tele-communication Service - Legal Consultancy Service - Works Contract Service - Renting of Immovable Property Service - Courier agency service - period from April 2013 to June 2015 - denial on account of nexus. Mmanpower recruitment or supply agency service - tele-communication service - refund benefit has been denied on the ground that the invoices issued by the service provider had mentioned the address of the appellants Head Office instead of the address appearing in the registration certificate - HELD THAT - The fact is not in dispute that the input services were consumed by the appellant in its Airoli Unit, for use/utilization in the output services exported by it. Thus, mere mentioning of address of the Head Office instead of such unit in the invoices will bear the character of a technical lapse and the original authority is competent to condone such lapses in terms of sub-rule (2) of Rule 9 of the Rules - matter remanded to the original authority for verification of the invoices and other particulars and thereafter to extend the refund benefit, if the services were used in the Airoli Unit for providing output service. Works Contract Service - HELD THAT - There is no specific finding by either of the authorities that the works contract service was availed by the appellant for the interior works or for other activities in respect of construction of buildings - For ascertaining the eligibility of input service since the fact has to be verified, the matter is also remanded to the original authority to find out the activities undertaken by the appellant with regard to such service. Renting of immovable property Service - the department has accepted the refund claim by the appellant but denied the claim on maintenance charges claimed by these service providers - HELD THAT - Since the maintenance charges collected by the service providers were in context with the property which was rented out by him, such maintenance charges should also be considered as part and parcel of renting of immovable property for the purpose of levy of service tax and also claim of the refund benefit. Thus, denial of benefit on such service is not proper and justified. Other services - Legal Consultancy Services, Courier Agency services, Manpower Recruitment and Supply Agency Services etc. - denial on the ground that invoices were not submitted by the appellant - HELD THAT - In view of the fact that the documentary verification has to be done at the original level, the matter is remanded to the original authority for verification of the documentary evidences to be produced by the appellant. Time Limitation - HELD THAT - It is an admitted fact on record that the refund applications were initially filed through on-line and subsequently filed in manual form along with requisite enclosures. Since the claims were lodged on-line, which was accepted in the departmental web-site, the claim applications cannot be considered as barred by limitation of time. Appeal allowed by way of remand.

Summary

Issues:
1. Refund benefit denial for specific input services
2. Denial of refund benefit for the period from October 2012 to December 2012
3. Lack of proper documentation submission for refund claims
4. Nexus establishment between input services and output service
5. Time limitation for filing refund applications

Issue 1: Refund benefit denial for specific input services

The appellant, engaged in providing Business Support Services to clients outside India, filed refund applications for service tax paid on input services from April 2013 to June 2015. The original authority and the Commissioner (Appeals) allowed refund for some input services but denied for others like Manpower Recruitment, Tele-communication, Legal Consultancy, Works Contract, Renting of Immovable Property, and Courier Agency services. The denial was based on the lack of nexus between input services and exported output services, as well as the absence of proper documentation. The Tribunal remanded the matter to the original authority for verification, emphasizing the need to establish the utilization of services for providing output services.

Issue 2: Denial of refund benefit for the period from October 2012 to December 2012

The Commissioner (Appeals) had denied the refund benefit for this period, citing that the refund applications were filed beyond the stipulated time frame. However, the Tribunal disagreed, stating that since the claims were initially filed online and then manually with enclosures, they were not barred by time limitation. The Trade Facilitation Notice issued by the Raigadh Commissionerate was deemed invalid to alter the statutory time limit. Consequently, the Tribunal allowed the refund benefit for this period.

Issue 3: Lack of proper documentation submission for refund claims

The Revenue argued that the appellant did not avail credit based on proper documents, leading to the denial of refund benefits. The Tribunal noted that the appellant had to establish the nexus between input and output services and that the relevant documents were not submitted within the prescribed time limit. However, since the claims were initially lodged online and accepted on the departmental website, they were not time-barred. The matter was remanded for verification of documentary evidence by the original authority.

Issue 4: Nexus establishment between input services and output service

The Tribunal emphasized the need to establish a connection between input services and the output service exported by the appellant. It highlighted technical lapses, such as address discrepancies in invoices, as issues that could be condoned by the original authority. The Tribunal directed a reexamination of various input services, including Manpower Recruitment, Tele-communication, Works Contract, and Renting of Immovable Property, to determine their utilization in providing output services.

Issue 5: Time limitation for filing refund applications

The Tribunal clarified that the Trade Facilitation Notice issued by the Raigadh Commissionerate could not alter the statutory time limit for filing refund applications. It held that the online filing of claims, which were subsequently submitted manually, did not render the applications time-barred. As a result, the Tribunal allowed the refund benefit for the period from October to December 2012, rejecting the time limitation argument put forth by the Revenue.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal regarding the denial of refund benefits for specific input services, time limitations for filing refund applications, the importance of establishing a nexus between input and output services, and the submission of proper documentation for refund claims. The Tribunal's decision to remand the matter for further verification and its interpretation of the time limitations provide a comprehensive understanding of the legal complexities involved in the case.