2016 (3) TMI 624 - AT - Service Tax

Admissibility - Refund claim - Unutilised CENVAT credit of service tax paid on input services - Rule 5 of the CENVAT Credit Rules 2004 read with Notification No.5/2006-CE(NT) dt. 14/03/2006 - Held that - when the definition of inputs had a wider ambit as it included almost all services within its purview as the definition included activities relating to business. As per Coca Cola India Pvt. Ltd. Vs. CCE, Pune-III 2009 (8) TMI 50 - BOMBAY HIGH COURT , KPMG Vs CCE. 2013 (4) TMI 493 - CESTAT NEW DELHI etc., the Hon ble High Courts as well as Tribunal, all the services listed are eligible for credit. Therefore, in view of the above judgments, the impugned services qualify as input services and the refund of credit is admissible. - Decided in favour of appellant with consequential relief

Summary

Issues:
Refund claims denial based on lack of nexus between input and output services.

Analysis:
The appellants, registered as 100% EOU, sought refund for unutilised CENVAT credit on input services related to Information Technology Software Services. The adjudicating authority and Commissioner (Appeals) rejected the refund claims citing lack of direct nexus between input and output services. The appellant argued that all services availed were for providing output services, emphasizing the wide ambit of input services definition pre-01/04/2011. The Commissioner interchangeably used "input" and "input services" and relied on cases analyzing credit eligibility. The appellant listed various services with corresponding amounts seeking credit, highlighting previous judgments supporting credit eligibility for similar services. The Revenue contended the appellant failed to establish correlation between foreign remittances and export invoices, requesting remand for verification.

The Tribunal noted the Revenue's argument on the lack of one-to-one correlation between remittances and export invoices, but emphasized that such correlation was not mandatory. The appellant demonstrated remittances were received in lump sum and adjusted against export invoices in a continuous account. All necessary documents were submitted for refund scrutiny, and the Tribunal found no dispute on service export or remittances. The period involved had a broad input services definition pre-01/04/2011, as supported by relevant judgments. The Tribunal criticized the Revenue for requesting verification despite available records and no further evidence requirement being specified. Refund denial was deemed a delay tactic, and based on precedents, the impugned services qualified as input services, making the refund admissible. Consequently, the Tribunal set aside the impugned order and allowed the appeal with any consequential relief.

This judgment clarifies the importance of establishing a nexus between input and output services for refund claims, emphasizing the applicability of broad input services definitions pre-01/04/2011 and the significance of supporting precedents in determining credit eligibility.