2017 (7) TMI 760 - AT - Service Tax

Refund claim - rejection on the ground that the CENVAT credit was not admissible to the appellant - Held that - in the present case no such show cause notice issued to the appellant for denial of Cenvat Credit availed under Rule 14 of Cenvat Credit Rules, 2004 - if the show cause notice has not been issued for disallowing Cenvat Credit by invoking Rule 14 of Cenvat Credit Rule, 2004 then subsequently such credit could not be denied to be refunded if the other conditions for refund are satisfied. We therefore, find it proper to remand the matter back to the file of Learned Commissioner (Appeals) with direction to re-determine the issue of refund of ₹ 1,19,18,476/- - appeal allowed by way of remand.

Summary

Issues:
1. Denial of Cenvat Credit availed by the appellant.
2. Refund claim rejection and appeal against the same.
3. Admissibility of various services as input services for Cenvat Credit.
4. Legal implications of the limitation period for demand and disallowance of Cenvat Credit.
5. Applicability of relevant case laws and rulings in the present case.

Analysis:

1. The appellant, a STPI Unit providing offshore BPO services, availed Cenvat Credit during a specific period. However, a portion of the credit was rejected for refund by the Original and Appellate Authorities citing inadmissibility. The Tribunal noted that no show cause notice was issued under Rule 14 of Cenvat Credit Rules, 2004 for denial of the credit. Relying on previous judgments, the Tribunal remanded the matter to the Commissioner (Appeals) for redetermination based on conditions for refund satisfaction without denial of credit, directing the submission of required documents and consideration of interest on delayed refund.

2. The appellant filed a refund claim amounting to a significant sum, which was partially allowed and partially rejected by the Assistant Commissioner and Commissioner (Appeals). The appeal was made against the rejection of a substantial refund amount. The Commissioner (Appeals) disallowed a portion of the refund based on the appellant's inability to provide necessary documents and evidence to support the claim. The issue was contested by the appellant, arguing for the commercial expediency of certain services for their operations. The Tribunal set aside the denial of a specific refund amount, allowing the appeal by remand for a fresh decision.

3. The eligibility of certain services, such as tour arrangements, incidental expenses, and hotel expenses, as input services for Cenvat Credit was disputed. The Commissioner (Appeals) held that these services did not qualify under the definition of input services as per the Cenvat Credit Rule, 2004. The appellant argued for the necessity and eligibility of these services for their day-to-day activities. However, the Commissioner (Appeals) maintained the denial of credit based on the lack of supporting documents and records. The Tribunal directed a re-examination of the issue along with the submission of required documents for a fresh decision.

4. The legal aspect of the limitation period for the demand and disallowance of inadmissible Cenvat Credit under Rule 14 of Cenvat Credit Rules, 2004 was raised. The appellant contended that no demand or show cause notice was issued within the limitation period, challenging the sustainability of the findings by the Original Authority and Commissioner (Appeals). The Tribunal considered relevant case laws and rulings to emphasize the importance of following due process in denying Cenvat Credit, ultimately remanding the matter for proper consideration.

5. The Tribunal referred to specific final orders passed in related cases to support its decision, highlighting the significance of adherence to legal precedents and judgments. The appellant and the Revenue presented their arguments, with the Tribunal carefully analyzing the contentions before reaching its decision to remand the matter for a fresh determination by the Commissioner (Appeals) in accordance with established legal principles and case laws.