2016 (11) TMI 159 - AT - Service Tax

Refund - 100% EOU - Notification No.5/2006 dated 14.3.2006 under Rule 5 of CENVAT Credit Rules - Business Auxiliary Service (BAS) - Held that - the impugned order is not sustainable in law denying the refund claim in respect of banking and financial services, BAS, and visa charges, I set aside the impugned order to that extent and hold that these services fall under the definition of input services and it has nexus with the manufacturing activity of the appellant - Appeal allowed by way of remand.

Summary

Issues:
Refund of unutilized service tax credit for CHA Service, C & F Service, and Telephone service under Notification No.5/2006 - rejection of partial claim - services falling under the definition of input services - remand for fresh consideration.

Analysis:
The appeal was against an order where the refund of unutilized service tax credit was partly allowed for CHA Service, C & F Service, and Telephone service. The appellant, a 100% EOU, filed a refund under Notification No.5/2006 for the period July 2011 to September 2011. The adjudicating authority rejected a portion of the refund and allowed the rest. The Commissioner (A) further allowed a partial refund for certain services but rejected the refund for banking and financial services, business auxiliary service, and visa charges. The appellant challenged this decision in the present appeal.

The appellant argued that the rejection of the partial claim was illegal and against precedent decisions. They contended that banking and financial services, business auxiliary service, and visa charges should be considered input services. The appellant claimed that the refund application was correct and supported by documents, including a CA certificate. They highlighted that the Commissioner (A) mistakenly combined two issues - excess availment of CENVAT credit and rejection of refund for excess credit on inputs. The appellant requested a remand to the Assistant Commissioner for a fresh decision based on all submitted evidence.

The AR supported the findings in the impugned order. However, the Tribunal found the impugned order unsustainable in denying the refund claim for banking and financial services, business auxiliary service, and visa charges. The Tribunal held that these services fell under the definition of input services and were linked to the appellant's manufacturing activity. The Tribunal decided to remand the case to the original authority for a fresh decision, except for the services mentioned above. The original authority was directed to pass a reasoned order following the principles of natural justice. The appeal was allowed by way of remand, emphasizing the need for a comprehensive reconsideration of the refund claim.

In conclusion, the Tribunal set aside the impugned order to the extent that it denied the refund claim for certain services, remanding the case for a fresh decision with detailed consideration of all submitted documents and adherence to the principles of natural justice.