2017 (6) TMI 907 - AT - Service Tax

100% EOU - Refund of CENVAT credit - input services - manpower recruitment and supply agency services - rent-a-cab scheme operator services - Held that - these two services viz., manpower recruitment agency and rent-a-cab operator service fall in the definition of input services as contained in Rule 2(l) of CCR - The various decisions of the Tribunal and the High Court has given a very wide interpretation of definition of input service so as to include all the activities relating to business and the appellant has been able to establish that these two services were very much necessary for smooth operation of the organization and are related to the business activities - the appellants are entitled to claim the refund of the same and the impugned order denying the refund is not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund of CENVAT credit on manpower recruitment and supply agency services and rent-a-cab scheme operator services.

Analysis:
The appellant, a Software Technology Park company, provided services to overseas entities and filed refund claims for unutilized input services. The Assistant Commissioner rejected the refund claims citing lack of nexus between FIRCs and export invoices. The Commissioner (A) allowed the refund subject to submission of a CA certificate. The Assistant Commissioner sanctioned part of the refund but rejected the portion related to service tax on manpower recruitment and supply agency services and rent-a-cab scheme operator services. The appellant appealed against this rejection.

The appellant argued that the rejection of refund on rent-a-cab services did not consider the definition of input service under Rule 2(l) of CCR, 2004. They contended that these services were essential for organizational operations and fell within the definition of input services. The appellant also highlighted the importance of manpower in their services and the necessity of rent-a-cab services for business activities, citing a Karnataka High Court decision. They emphasized that eligibility for CENVAT credit and refund should not be judged differently.

The AR supported the impugned order's findings. Upon review, the Tribunal found that both manpower recruitment agency and rent-a-cab operator services qualified as input services under Rule 2(l) of CCR. The Tribunal noted the broad interpretation given by previous decisions to include activities related to business within the definition of input service. It was established that these services were crucial for the organization's smooth operation and business activities. Consequently, the Tribunal held that the appellant was entitled to claim the refund for these services, setting aside the impugned order and allowing the appeal.