2016 (6) TMI 682 - AT - Service Tax

Refund claim - Unutilized Cenvat Credit of input services - Rule 5 of CENVAT Credit Rules, 2004 read with Notification No.5/2006-CE(NT) dt. 14/03/2006 - Export of Consulting Engineer Services and Information Technology Services to foreign entities - 100% EOU - input invoices are addressed to unregistered premises of appellant - input services do not have nexus with the output services. Held that - I am convinced of the arguments and explanation put forward by the appellant about each service and their necessity / nexus with the output services. - The Larger Bench of Hon ble Supreme Court in the case of Ramala Sahakari Chini Mills Ltd., UP Vs. CCE, Meerut-I 2016 (2) TMI 902 - SUPREME COURT answered the reference stating that the word include does not have a restrictive meaning. It is submitted that the authorities below have wrongly applied the judgment laid in Maruti Suzuki case. It is also his submission that Rule 4A of the Service Tax Rules, 1994 does not mandate that the premises of service recipient has to be a registered premises. It is sufficient that the name and address of service recipient is shown in the invoice. Therefore, it is found that the rejection of refund is not just or proper and the appellant is eligible for refund of the amounts shown. - Decided partly in favour of appellant with consequential relief

Summary

Issues:
Challenge to disallowance of refund on input services.

Analysis:
1. The appellant, engaged in providing consulting engineer services and Information Technology Services exported outside India, filed a refund claim for unutilized CENVAT credit. The original authority sanctioned a certain amount but rejected a portion, citing reasons like invoices addressed to unregistered premises and lack of nexus between input and output services.

2. The Commissioner(Appeals) upheld the rejection based on the judgment in Maruti Suzuki Ltd. case. The appellant contested the disallowed amount, totaling to &8377; 4,82,146, based on specific services like car parking charges, maintenance charges, and housekeeping services, claiming their necessity and nexus with output services.

3. The appellant's representative argued that the Maruti Suzuki judgment pertained to interpretation of inputs, not input services. Referring to a Larger Bench decision in Ramala Sahakari Chini Mills Ltd. case, it was highlighted that the word 'include' should not be restrictively interpreted. The appellant asserted that the authorities misapplied the Maruti Suzuki judgment.

4. Another reason for disallowance was the unregistered premises on the input invoices. The appellant contended that Rule 4A of the Service Tax Rules, 1994 did not mandate the service recipient's premises to be registered, emphasizing that showing the recipient's name and address sufficed. The appellant argued that the refund denial was incorrect.

5. The appellant's arguments were supported by Shri Abhishek Rastogi, while the learned AR, Shri Rajesh Jacob, backed the findings in the impugned order. After hearing both sides, the Member(Judicial) found the appellant's arguments convincing and set aside the rejection of refund. The appeal was partly allowed, granting consequential reliefs as applicable.

This judgment highlights the importance of establishing nexus between input and output services for claiming CENVAT credit refunds, clarifying the interpretation of relevant legal provisions and precedents to determine eligibility. The decision emphasizes the need for adherence to procedural requirements like invoice details and challenges the restrictive application of past judgments, ensuring fair treatment for taxpayers in similar situations.