2016 (3) TMI 204 - AT - Service Tax

Refund claim - Service tax credit on the input services used for providing output services - Services were rendered to the respondent s chennai branch before the registration and registration was granted subsequently - Held that By relying on the decision taken by the same tribunal in the case of J.P. Morgan Services India Pvt. Ltd. 2015 (2) TMI 467 - CESTAT MUMBAI, refund claim is granted as registration is not a pre-requisite for availment of CENVAT credit. Refund claim - Service tax credit on the input services used for providing output services - Services like rent-a-cab service, interior design service, rentals paid for the office premises, professional fees paid to C.A., purchase of foreign currency for the staff travelling abroad were rendered by the respondent but contended that these services do not qualify as input services they do not play any role in providing output service - By relying on the decision of division bench in the case of Morgan Stanley Advantage Services 2014 (12) TMI 330 - CESTAT MUMBAI, the services provided by respondent qualify as input service and therefore refund claim is granted. - Decided in favour of revenue

Summary

Issues involved:
1. Refund claim filed by respondent for service tax credit on input services used for providing output services.
2. Dispute over refund amount sanctioned by adjudicating authority.
3. Registration requirement for availing CENVAT credit.
4. Qualification of certain services as input services for refund.

Detailed analysis:
1. The appeal was filed by Revenue against the Order-in-Appeal regarding a refund claim made by the respondent for service tax credit on input services used for providing Information Technology Services. The respondent sought refund of service tax paid on services used for output services. The adjudicating authority sanctioned a partial refund, which was further increased by the first appellate authority. The Revenue contested the first appellate authority's decision before the Tribunal on various grounds.

2. The Revenue argued that registration is a prerequisite for availing CENVAT credit and claimed that certain services, such as rent-a-cab service, interior design service, and professional fees, do not qualify as input services for providing output services. The respondent, represented by a Chartered Accountant, referenced previous Tribunal decisions to support their claim that registration is not mandatory for availing CENVAT credit and that various services are indeed used for rendering output services.

3. The Tribunal found that the respondent's Information Technology Services were exported, and input services were used for providing these services. Regarding the disputed refund amount related to the Chennai branch's registration, the Tribunal referred to a previous case where it was held that registration is not a mandatory requirement for claiming CENVAT credit. The Tribunal emphasized that the registration was subsequently granted to the branch and dismissed the Revenue's argument.

4. Finally, the Tribunal addressed the qualification of certain services as input services for refund purposes. Citing a previous case, the Tribunal stated that if an input service is used for the purpose of exporting output services, the refund of input service credit should be available. It was noted that the objection to the refund claims was raised only at the time of filing the claims, and the Tribunal emphasized that the eligibility for refund cannot be questioned if the credit was permitted to be taken initially. The Tribunal concluded that both issues were covered by previous decisions, upheld the impugned order, and rejected the appeal filed by Revenue.