2016 (11) TMI 189 - AT - Central Excise

Refund of unutilized credit of service tax - 100% EOU - Rule 5 of CENVAT Credit Rules, 2004 - input services i.e. bank charges, Business Exhibition services, Freight inwards, import clearance, maintenance and repair, telecommunication and security services under Rule 5 of the Cenvat Credit Rules 2004 - Held that - the disputed services viz. Banking and Business Exhibition Services have nexus with the business of manufacture and export of finished goods and the same falls in the definition of input services prescribed in Rule 2(l) of the Cenvat Credit Rules, 2004 - the Courts have given very extended interpretation to the definition of input services - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim for unutilized credit of service tax availed in respect of various input services - Eligibility of refund - Interpretation of 'input services' under Cenvat Credit Rules 2004.

Analysis:

Issue 1: Refund Claim for Unutilized Credit of Service Tax
The case involves a manufacturer of polished granite slabs, tiles, and strips who filed a refund claim for unutilized credit of service tax availed in respect of input services such as bank charges, Business Exhibition services, Freight inwards, import clearance, maintenance and repair, telecommunication, and security services under Rule 5 of the Cenvat Credit Rules 2004. The Assistant Commissioner sanctioned a partial refund and disallowed a portion of the claim. The Revenue filed an appeal before the Commissioner, who allowed the appeal and set aside the original order. The appellant then filed the present appeal against the Commissioner's decision.

Issue 2: Eligibility of Refund - Interpretation of 'Input Services'
During the appeal hearing, the appellant's consultant argued that the impugned order was not sustainable as it disregarded decisions by higher judicial fora and that the disputed services, specifically Banking and Business Exhibition Services, were directly related to the business of manufacturing and exporting finished goods and thus qualified as 'input services' under Rule 2(l) of the Cenvat Credit Rules 2004. The consultant cited various authorities to support the argument, emphasizing the extended interpretation given by courts to the definition of 'input services.' On the other hand, the Revenue's representative reiterated the Commissioner's findings.

Judgment:
After hearing both parties and reviewing the cited judgments, the Judicial Member concluded that the impugned order was not sustainable in law. As a result, the order was set aside, and the appeal of the appellant was allowed with any consequential relief deemed necessary. The judgment was pronounced in open court, providing a favorable outcome for the appellant regarding the refund claim for unutilized credit of service tax on the specified input services.