2017 (6) TMI 947 - AT - Service Tax

EOU - Refund of accumulated Input service credit - Event Management Service - Real Estate Agent service - Tour Operators service - travel agent service - denial on the ground that they are not essential for discharge of the output services - Held that - in view of the various judgments relied upon by the appellant wherein the definition of input service has been rightly interpreted to include any service which is essential for providing the output service - appellant has been able to establish the nexus between the disputed four input services and the output services exported and all these services have been held to be input services - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Refund claim denial for accumulated input service credit related to Event Management Service, Real Estate Agent service, Tour Operators service, and travel agent service.

Analysis:
The case involved an appeal against the order passed by the Commissioner(Appeals) partially allowing the refund claim of the appellant, but disallowing the refund of accumulated input service credit for specific services. The appellant, an EOU primarily engaged in exporting services, filed a refund claim under Rule 5 of CENVAT Credit Rules, 2004. The Assistant Commissioner rejected the claim, which was partially overturned by the Commissioner(Appeals). The CESTAT, Bangalore remanded the matter for verification, leading to the High Court setting aside the Tribunal's order for re-examination.

The appellant argued that the impugned order did not consider the definition of input service as per Rule 2(l) of CCR and cited judicial precedents supporting their claim. They contended that the nexus between input and output services is not a prerequisite for refund under Rule 5. They referenced decisions like CCE, Pune Vs. Emerson Innovation Center to support their stance.

The appellant further argued against different eligibility criteria for CENVAT credit and refund under Rule 5, citing cases like CST Delhi Vs. Convergys India Pvt. Ltd. The appellant emphasized that the Revenue cannot determine the essentiality of services for business operations, relying on legal principles and precedents.

Regarding the specific services in question, the appellant justified the eligibility of Event Management Service, Real Estate Agent service, Tour Operators service, and travel agent service as essential for providing output services. They presented arguments supported by various decisions such as CCE, Delhi-III Vs. Maruti Suzuki India Ltd. and ARM Embedded Technologies Pvt Ltd.

After considering both parties' submissions and relevant judgments, the Tribunal found in favor of the appellant. The Tribunal agreed with the appellant's interpretation of input services and established a nexus between the disputed services and the output services exported. Citing the precedent set by previous decisions, the Tribunal set aside the impugned order, allowing the appeal with consequential reliefs.

In conclusion, the Tribunal's decision on 25/05/2017 favored the appellant, granting them the refund of accumulated input service credit for Event Management Service, Real Estate Agent service, Tour Operators service, and travel agent service, as these services were deemed essential for providing output services exported.