2017 (10) TMI 260 - AT - Central Excise

100% EOU - refund of unutilized CENVAT credit - input services - AMC - calibration charges - freight outward - garden maintenance - Held that - as far as inputs services viz., AMC, calibration charges, freight outward, garden maintenance are concerned, they fall in the definition of input service and the refund has been wrongly rejected - refund allowed. Refund claim - Erection, commissioning and installation service - labour charges - Held that - this needs to be verified by the original authority on the basis of documents which may be submitted by the appellant Other services viz., Banking and Financial Service, Consultancy charges, manpower supply, rent charges, implementation charges, they also fall in the definition of input service, but they need to be verified by the original authority on the basis of the documents - matter on remand. CENVAT credit - basis of allocation of credit through ISD - Rule 7 of CCR, 2004 - The Corporate Office of the appellant has got the ISD registration on the basis of which they have transferred the credits to the respective plant in terms of Rule 7 of CCR which has not been appreciated by the authorities below. Therefore, this case needs to be remanded back to the original authority who will examine the entire case - appeal allowed by way of remand.

Summary

Issues:
Refund claim rejection based on CENVAT credit rules and judicial precedents.

Analysis:
The appellant, a 100% EOU manufacturing bulk drugs, filed a refund claim for unutilized CENVAT credit of service tax paid on inputs, input services, and ISD credit. The original authority rejected the claim, partially allowed by the Commissioner (A). The Commissioner (A) rejected a significant portion of the claim, including amounts on inputs, input services, and ISD credit. The appellant appealed, arguing that the rejection was not in line with CCR, 2004, and judicial precedents. The appellant provided certified copies of invoices for reference. The appellant contended that various input services were essential for manufacturing, citing relevant case laws. The Commissioner (A) rejected refund claims for services like annual maintenance, calibration, freight outward, garden maintenance, etc., on grounds not related to the manufacturing process. The appellant argued that the ISD distribution of credits was valid under Rule 7 of CCR, which the authorities failed to appreciate.

The appellant's counsel presented arguments supported by case laws to establish that the rejected services fell within the definition of input services. The Commissioner (A) did not appreciate the valid distribution of credits by the Corporate Office through ISD. The judgment remanded the case to the original authority for a fresh order, considering the appellant's submissions and verifying the documents. The judgment allowed the appeal by way of remand, emphasizing the need for a thorough examination by the original authority.

This detailed analysis highlights the key contentions, arguments, and legal principles involved in the judgment, providing a comprehensive overview of the case and its implications.