2016 (11) TMI 521 - AT - Service Tax

Refund claim for unutilized input service credit under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 5/2006-C.E.(NT) dated 14/3/2006 - input services - Event Management Services - Mandap Keeper Services - Health and Fitness Services - Pandal and Shamiana Contractor s Services - whether the denial of refund on the ground that the said services are not input services, justified? - Held that - these services are input services and have nexus with output services, we therefore hold that the Cenvat credit as well as consequential refund against exports of the services in respect of above services are admissible. As regard the discrepancy in the name of the appellant appearing in the input services invoice, since the appellant was earlier operating in different name and subsequently after amalgamation the name was changed therefore in our view if the invoices is bearing old that does not mean invoices was issued to some different persons but it is to the appellant only therefore only because of the different name the Cevnat credit/refund cannot be denied. Similarly, invoices raised in the name of the Deutsche Bank cannot be held invalid as Deutsche Banch is not a different entity, it is a part and parcel of the appellant company only, therefore on invoice bearing the name of Deutsche Bank Cenvat credit as well as refund is admissible. Incomplete name and description of services appearing in invoices is clerical error that does not conclude that the appellant have not received and used the services, therefore for this reason Cenvat credit/refund cannot be denied - As regard the common issue in all the refund i.e. dispute of application of correct formula and re-quantification of the refund amount, the matter needs to be re-verified by the adjudicating authority for this purpose, we remand the matter to the original adjudicating authority. Appeal disposed off - matter remanded.

Issues Involved:
1. Nexus of input services with output services.
2. Discrepancies in invoices.
3. Services rendered to SEZ units.
4. Application of the correct formula for refund calculation.

Issue-wise Detailed Analysis:

1. Nexus of Input Services with Output Services:
The primary issue was whether the input services used by the assessee had a direct nexus with the output services provided, which were exported. The Commissioner (Appeals) allowed the Cenvat credit and refund, considering the nature and use of the services. The services included Commercial Coaching or Training Services, Business Auxiliary Services, Courier Agency Services, Real Estate Agent’s Services, Rent a Cab Scheme Operator’s Services, Advertising Agency’s Services, Architect Services, Cable Operator’s Services, Cargo Handling Services, General Insurance Services, Supply of Tangible Goods Services, Insurance Auxiliary Services, Outdoor Caterer’s Services, Storage and Warehousing Services, Video Production Agency Services, Technical Testing and Analysis Services, and Tour Operator Services. These services were deemed essential for the business operations and had a clear nexus with the export services. Therefore, the tribunal agreed with the Commissioner (Appeals) that Cenvat credit and refund were admissible.

2. Discrepancies in Invoices:
Several discrepancies were pointed out in the invoices for the period October 2008 to March 2009. These included issues such as invoices not being in the name of the assessee, incomplete name descriptions, invoices raised in the name of Deutsche Bank, and unregistered addresses. The tribunal found that these discrepancies were either clerical errors or due to the company’s name change after amalgamation. It was held that these discrepancies did not invalidate the invoices as the services were indeed received and used by the appellant. Therefore, Cenvat credit and refund could not be denied on these grounds.

3. Services Rendered to SEZ Units:
The issue of services rendered to SEZ units was also addressed. The tribunal found that the SEZ unit belonged to the appellant company and was engaged in providing export services. Therefore, the services rendered to the SEZ unit were considered admissible for refund.

4. Application of the Correct Formula for Refund Calculation:
There was a common issue of computation error due to the incorrect application of the prescribed formula for calculating the refund claim. The tribunal agreed that this aspect needed to be re-verified. The matter was remanded to the original adjudicating authority for re-verification and correct calculation of the refund amount. The adjudicating authority was instructed to provide sufficient opportunity for personal hearings and allow the assessee to submit necessary documents for correct calculation.

Conclusion:
The tribunal concluded that the Cenvat credit and refund were admissible for the services used by the assessee for providing export services. The discrepancies in invoices were deemed clerical errors, and services rendered to SEZ units were considered valid for refund. The issue of computation error was remanded to the original adjudicating authority for re-verification. The appeals were disposed of by way of remand for the limited purpose of re-quantification of the refund amount.

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