2017 (6) TMI 795 - AT - Central Excise

100% EOU - Refund of CENVAT credit - Banking and Other Financial Charges - Cargo Handling Services - denial on the ground that all the input services are not used in or in relation to the manufacture of goods - Held that - both the input services viz. Banking and Other Financial Charges and also Cargo Handling Services fall in the definition of input service as held in the case of CCE, Nagpur Vs. Ultratech Cement Limited 2010 (10) TMI 13 - BOMBAY HIGH COURT wherein the input service definition has given very wide interpretation to include any service in relation to business - in the absence of these input services it is very difficult for the appellant to affect the export of goods - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund of cenvat credit for Banking and Other Financial Charges and Cargo Handling Services.

Analysis:
1. Refund Claims Rejection: The appellants, being 100% EOU exporters, filed six refund claims under Rule 5 of the Cenvat Credit Rules for input services related to manufacturing goods for export. The adjudicating authority rejected the refund, stating that not all input services were used in or in relation to manufacturing. The First Appellate Authority partially allowed the refund but rejected it for Banking and Other Financial Charges and Cargo Handling Services for exports. This led to the filing of six appeals by the appellants.

2. Appellant's Argument: The consultant for the appellant argued that the rejection of the refund for Banking and Other Financial Charges and Cargo Handling Services did not consider the definition of input service in Rule 2(l) of the Cenvat Credit Rules. The consultant cited higher judicial decisions supporting these services as input services. They contended that these services were essential for manufacturing activities and should be eligible for refund under Rule 5.

3. Judicial Interpretation: After hearing both parties and reviewing the records, the tribunal found that Banking and Other Financial Charges and Cargo Handling Services fell within the definition of input services. Citing precedents like CCE, Nagpur Vs. Ultratech Cement Limited, the tribunal emphasized the broad interpretation of input services. It concluded that without these services, the export of goods would be challenging. The tribunal held that the impugned orders were unsustainable in law and set them aside, allowing the appeal with consequential relief.

This detailed analysis of the judgment highlights the issues, arguments presented, and the tribunal's decision based on legal interpretations and precedents.