2016 (12) TMI 1523 - AT - Central Excise

Refund - Cenvat credit - Rule 5 of CENVAT Credit Rules (CCR) 2004 - NNo.27/2012-CE - Held that - The adjudicating authority has reached to a categorical finding of nexus between the input service and the manufacture of excisable goods by the appellant. Learned counsel further submitted that all the services have been held to be input service by various decisions of the Tribunal and the High Court and in support of his submission - Appeal allowed - decided in favor of the assessee.

Summary

Issues:
Appeal against disallowance of refund claim of accumulated CENVAT credit under Rule 5 of CENVAT Credit Rules 2004 on banking and financial services, business auxiliary service, and repair and maintenance and testing service due to lack of nexus.

Analysis:
The appellant, a 100% Export Oriented Unit engaged in manufacturing spectacle lenses, filed a refund claim under Rule 5 of CENVAT Credit Rules 2004. The original authority sanctioned a substantial portion of the refund, but the Department appealed before the Commissioner (A) who disallowed the refund on various services amounting to ?11,01,546, citing lack of nexus. The appellant challenged this decision in the present appeal.

The appellant argued that the impugned order was not sustainable as the Commissioner (A) did not consider the evidence establishing nexus between the services and manufacturing activity. The appellant contended that the services in question were included in the definition of input services. Referring to the original authority's order, the appellant highlighted that all aspects were considered before sanctioning the refund claim, and a clear nexus between input services and manufacturing was established. The appellant also cited precedents where similar services were considered input services by the Tribunal and High Court.

In response, the learned AR reiterated the findings in the impugned order disallowing the refund on the mentioned services. However, after considering the submissions and perusing the cited judgments, the Tribunal concluded that the issue was squarely covered in favor of the appellant based on the precedents. Consequently, the appeal was allowed by setting aside the impugned order and granting relief to the appellant.

Therefore, the Tribunal ruled in favor of the appellant, allowing the appeal against the disallowance of the refund claim on banking and financial services, business auxiliary service, and repair and maintenance and testing service, emphasizing the established nexus between the input services and the manufacturing activity.