2017 (6) TMI 376 - AT - Service Tax

Refund claims - Rule 5 of CCR, 2004 - Renting of Immovable Property service - Commercial Training or Coaching service - Telecommunication Services - Management or Business Consultancy service - rejection of refund on the ground that these input services were ineligible for the purpose of availing input service credit - Held that - appellants have admitted that they have paid the service tax liability in respect of renting of immovable property by mistake - even if the appellants have paid or suffered tax liability by mistake, they cannot claim the refund thereof under Rule 5 ibid but, under other facilitating provisions in the law - refund rightly rejected. Commercial training or coaching services - Held that - this relates to training of nominated employees - this would be an eligible input service, and in particular, they are also not barred by exclusion clause of Rule 2 (l) of CCR, 2004 - refund allowed. Tele-communication service - Held that - concerning landline/mobile telephones installed at the residence of the employee, I am of the considered opinion that the credit should be permitted - there is no allegation that they have not been used for the purpose of the appellant s business or for that matter, only for the personal use and consumption of an employee - refund allowed. Management or business consultancy service - Held that - What has been denied is the additional charges for transportation claimed by the consultancy - Appellant has not produced any contract or agreement wherein such transport charges are required to be paid, in addition to the consultancy charges - the credit availed in respect of such transport charges will not be eligible for the purpose of refunds under Rule 5 ibid - refund rejected. Appeal allowed - decided partly in favor of appellant.

Summary

Issues:
Refund claims under Rule 5 of Cenvat Credit Rules, 2004 for certain input services denied.

Analysis:
The dispute in this case revolves around the refund claims filed by the appellants under Rule 5 of Cenvat Credit Rules, 2004, specifically regarding the denial of credit for certain input services. The original authority partly sanctioned the refund claims, rejecting amounts related to services such as Renting of Immovable Property, Commercial Training or Coaching, Telecommunication Services, Management or Business Consultancy, Sponsorship Service, and Maintenance & Repairs Service of Guest House. The Commissioner (Appeals) upheld the original orders, leading the appellants to appeal before the forum.

During the hearing, the appellant decided not to press the issue regarding sponsorship service and maintenance and repair service of the guest house. The consultant for the appellants argued for the eligibility of availing service tax credits for the remaining disputed input services. The arguments presented included the Director's mistaken payment of service tax for Renting of Immovable Property, delegate and participation fees for Commercial Coaching and Training, landline and mobile telephone bills for Telecommunication service, and consultancy charges for Management Consultancy service.

On the other hand, the respondent supported the impugned order, contending that the renting of immovable property service was related to the Director's ownership, not the company's lease. Regarding telecommunication services, it was questioned whether the services were used for the company's activities, and for management consultancy services, the transportation charges were deemed separate from consultancy charges.

After hearing both sides and examining the facts, the judgment addressed each issue individually. It was noted that the appellants admitted to paying service tax for renting immovable property by mistake, leading to the rejection of the refund claim for this service. However, the Commercial Training or Coaching services were deemed eligible for input service credit. Similarly, the Telecommunication service credits were allowed as there was no evidence of personal use by employees. In contrast, the additional transportation charges claimed for Management Consultancy services were not supported by any agreement, leading to the rejection of credit for these charges.

In conclusion, the appeals were partly allowed based on the analysis and findings for each disputed input service.