2017 (7) TMI 968 - AT - Service Tax

100% EOU - refund of unutilized CENVAT credit - scope of input services - consultancy services - maintenance and repair services - labour contract services - clearing services - Rule 5 of the CCR, 2004 - Held that - the disputed services herein fall in the definition of input services and therefore the appellant is entitled to refund of CENVAT credit under Rule 5 of the CCR 2004 - reliance placed in the case of M/s. Coca Cola India Pvt. Ltd. Versus The Commissioner of Central Excise, Pune-III 2009 (8) TMI 50 - BOMBAY HIGH COURT , CST, DELHI Versus CONVERGYS INDIA PVT. LTD. 2009 (5) TMI 50 - CESTAT, NEW DELHI and Circular No 120/01/2010-ST dated 19.1.2010 F.No 354/268/2009-TRU - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of CENVAT credit under Rule 5 of the CENVAT Credit Rules.

Analysis:
The judgment pertains to an appeal against the denial of CENVAT credit by the Commissioner (Appeals) under Rule 5 of the CENVAT Credit Rules. The appellant, a 100% EOU engaged in the export of processed gherkins, filed a refund claim for unutilized CENVAT credit for the quarter January to March 2010. The Assistant Commissioner rejected a portion of the refund claim, and the Commissioner (Appeals) further denied a portion of the refund, leading to the present appeal.

The appellant argued that the impugned order was unsustainable as it did not consider the submissions and relevant legal precedents. The appellant contended that services such as consultancy, maintenance, repair, labor contracts, and clearing services qualified as input services under Rule 2(l) of the CENVAT Credit Rules before its amendment in 2011. The appellant supported its argument with various judgments and circulars, highlighting that the services had a direct or indirect relation to the manufacturing process and business activities.

The Tribunal, after reviewing the arguments and cited legal authorities, concluded that the disputed services indeed fell within the definition of input services. Relying on the precedents and the broad interpretation of activities relating to business, the Tribunal held that the appellant was entitled to the refund of CENVAT credit under Rule 5 of the CENVAT Credit Rules. Consequently, the Tribunal allowed the appeal of the appellant, granting the refund along with any consequential relief.

In summary, the judgment addressed the denial of CENVAT credit under Rule 5 of the CENVAT Credit Rules, emphasizing the inclusion of various services as input services based on legal interpretations and precedents. The Tribunal's decision favored the appellant, granting the refund of CENVAT credit and highlighting the broad scope of activities relating to business in determining eligibility for such credits.