2016 (5) TMI 682 - AT - Service Tax

Refund claim - Unutilized accumulated Cenvat credit - Manpower Recruitment Agency Services - Export of services as providing to foreign client - Department contended that input services have no nexus with the output services - Held that - all the services except Rent-a-Cab Service are essential services for providing the service of Manpower Recruitment Agency. it is also found that any service whether it is used for providing output services or otherwise, cannot be decided in isolation but it is necessary to see what is the output service and accordingly it can be decided whether the service is input service for providing a particular output service. In the present case, output service is Manpower Recruitment Services. As per the nature of aforesaid input services, they are essential services for providing Manpower Recruitment Agency Services . Therefore, no reason found to interfere in the impugned order which is just and proper and in conformation to definition of input services. Refund claim - Rent-a-cab Service - Held that - this service was excluded from the definition of input services in terms of Clause (B) of Rule 2(1) of CCR, 2004, therefore even though the same was used for the conveyance of staff but due to specific exclusion, the same does not remain as input service and therefore refund is not admissible in respect of Transport Service (Rent-a-Cab Services). - Decided partly in favour of appellant

Issues:
1. Duplication of appeal filed by Revenue leading to dismissal.
2. Refund claim of unutilized accumulated Cenvat credit for various services provided by the appellant.
3. Dispute over the nexus of input services with the export of services.
4. Exclusion of certain services from the definition of input services.
5. Admissibility of refund for Rent-a-Cab service.

Analysis:
1. The Revenue inadvertently filed a duplicate appeal (ST/89932/14) which was a repetition of another appeal (ST/89930/14), leading to its dismissal as infructuous by the Tribunal.

2. The appellant, engaged in providing 'Manpower Recruitment Agency Services' to foreign clients, filed refund claims for accumulated Cenvat credit related to various services. The Original Authority partly allowed the refund claim, rejecting a major portion on grounds of services not being considered as input services for output services. The Commissioner (Appeals) later allowed the appeals, emphasizing the nexus of input and output services as well as the export nature of services. The Revenue challenged this decision, focusing solely on the lack of nexus between input services and output services without disputing the nature of export services.

3. The Revenue argued that the appellant failed to establish the required nexus between input services and the export of services, especially after certain services were excluded from the definition of input services post an amendment in 2011. The Revenue contended that services used for employee welfare were not admissible as input services.

4. The respondent contended that all services for which refund was sought were crucial for providing output services that were exported, as evidenced before the authorities. The Commissioner (Appeals) supported this claim, allowing the refund. However, the respondent acknowledged that the 'Rent-a-Cab' service was excluded under Rule 2(1) of CCR, 2004, and thus not admissible for refund.

5. The Tribunal examined the nature and use of each service, emphasizing their essential role in providing 'Manpower Recruitment Agency Services.' It was noted that all services, except 'Rent-a-Cab Service,' were integral to the output service. The Tribunal allowed the refund only for Transport Services involving Rent-a-Cab, as it was specifically excluded from the definition of input services. Consequently, the Tribunal dismissed one appeal, partly allowed another for the Transport Services refund, and dismissed the duplicate appeal as infructuous.

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