2017 (6) TMI 767 - AT - Service Tax

CENVAT credit - input services - Management or Business Consultant s Service - Management, Maintenance or Repair Service - Commercial Training or Coaching Service - Custom House Agent s service - Security Agency s service - Held that - all these services are in relation to the services provided by the appellant who are service providers of ITSS for export - There is no denial as to the fact that appellant had exported ITSS services by using these services in the premises as also that the service providers have paid the tax on the services - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against denial of Cenvat credit for various services.

Analysis:
The appellant contested the denial of Cenvat credit amounting to INR 8,23,775 for different services. The first appellate authority rejected the credit for Management or Business Consultant's Service, Management, Maintenance or Repair Service, Commercial Training or Coaching Service, Custom House Agent's service, and Security Agency's service. The denial was based on reasons such as ineligibility of credit for service tax paid on out-of-pocket expenses, expenses not used in output service, non-essential input service, and ineligible services provided to female employees. However, the appellant argued that all these services were related to their business activities and were necessary for conducting business. The appellant had discharged the service tax liability for these services, which was not disputed.

The Tribunal observed that the services in question were essential for the appellant's business operations and were directly related to the export of ITSS services. The services provided by the appellant were used in the premises for exporting ITSS services, and the service providers had paid the necessary taxes. Additionally, the appellant had complied with statutory requirements, such as providing security to female employees as mandated by the Government of Andhra Pradesh. The Tribunal noted that the appellant was eligible for a refund of the service tax amount paid to the service providers for rendering export of ITSS services.

Therefore, the Tribunal set aside the impugned order to the extent contested and allowed the appeal in favor of the appellant. The judgment emphasized the importance of considering the essentiality of services in relation to business activities and the eligibility of Cenvat credit for services directly linked to the export of services, ultimately granting relief to the appellant based on the merits of the case.