2016 (11) TMI 106 - AT - Service Tax

Rejection of refund claim - export of services - CENVAT credit denied - Chartered Accountant s Services - Courier Services - Commercial Training or Coaching Centre s Services - Cleaning Services - Telecommunication Services - Works Contract Services - whether the denial of CENVAT credit on these services justified on the ground that the services have no nexus with the output services exported - Held that - works contract service - these input services are not hit by the exclusion clause of 2(l) of the CENVAT Credit Rules, which excludes service portion in the execution of a works contract and construction services in so far as they are used for (a) construction or execution of a works contract of a building or civil structure or a part thereof; or (b) laying of foundation or making of structures of capital goods Hence I hold that the works contract services received by the appellant are eligible input services. Chartered Accountant s services - Held that - these are akin to eligible input services like auditing, accounting listed in the inclusive definition of input service in Rule 2(I) of the Rules. They are also not barred by any of the exclusions to the said Rule 2(l). This being so, these services will also take on the colour of an eligible input service. Reference made to the decision of case CST Delhi vs Convergys India Pvt Ltd 2009 (5) TMI 50 - CESTAT, NEW DELHI where it was held that there cannot be two different yardsticks, one for permitting credit and the other for eligibility for granting rebate. Whatever credit has been permitted to be taken, the same are permitted to be utilized and when the same is not possible there is provision for grant of refund or as rebate. Without questioning the credit taken, the eligibility to rebate cannot be questioned - In the common parlance, if the cost of such goods and services becomes part of the cost of the final product or the cost of the output services, as the case may be, then they are understood as input and input services in relation to said final products or the output services. The disputed input services are very much eligible input services and by implications, the appellant is eligible for refund of the credit - appeal allowed - decided in favor of appellant.

Issues:
1. Eligibility of Cenvat credit refund for various input services under Renting of Immovable Property Services and Information Technology Software Services.
2. Disputed input services rejected for refund claim.
3. Appeal against the Order-in-Original No. (R) 130/2012 S.Tax.
4. Contention regarding eligibility of disputed input services.
5. Tribunal's consideration of relevant case laws and previous orders.
6. Works Contract Service eligibility for Cenvat credit.
7. Chartered Accountant's services as eligible input services.
8. Interpretation of judgments related to input services eligibility.
9. Tribunal decisions on eligibility for granting rebate based on input services.

Analysis:

1. The Appellant, a service tax assessee under Renting of Immovable Property Services and Information Technology Software Services, filed a refund claim for unutilized Cenvat credit. The claim was partially granted by the Assistant Commissioner, but part of the claim was rejected for services like Chartered Accountant's Services, Courier Services, Commercial Training or Coaching Centre's Services, Cleaning Services, Telecommunication Services, and Works Contract Services.

2. The main contention of the Appellant was that the disputed input services were essential for providing output services. They provided detailed justifications for each service, citing case laws in support of their arguments.

3. The Appellant appealed the Assistant Commissioner's decision before the Commissioner of Customs, Central Excise and Service Tax (Appeals -II), who upheld the rejection of part of the refund claim.

4. During the hearing, the Appellant's counsel reiterated the grounds of appeal, emphasizing the necessity of the disputed services for their business operations. They referenced a previous order by CESTAT Hyderabad in their favor.

5. The Tribunal considered the arguments presented by both sides and reviewed the facts and records of the case. They relied on a previous order by the same Bench that recognized Telecommunication Services, Commercial Training or Coaching Services, Cleaning Activity Services, and Courier Services as eligible input services.

6. Regarding Works Contract Service, the Tribunal found that the services were used for minor works essential for the business and were not excluded under the Cenvat Credit Rules, making them eligible for credit.

7. Chartered Accountant's services were deemed akin to eligible input services like auditing and accounting, falling within the inclusive definition of input service in the Rules.

8. The Tribunal discussed the interpretation of judgments related to input services' eligibility, highlighting that the denial of refund based on certain judgments was not applicable to the present case.

9. Referring to Tribunal decisions on rebate eligibility, the Tribunal concluded that the disputed input services were indeed eligible, allowing the Appellant's appeal and granting the refund of the disallowed amount.

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