2017 (11) TMI 295 - AT - Service Tax

Refund claim - input services - security agency service - manpower recruitment service - denial on the account of nexus - Held that - the learned Commissioner (A) has considered both these services as input services, hence the same are necessary for rendering the output service - In view of the well-reasoned order passed by the Commissioner (A), I find no infirmity in the impugned order - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against order granting refund on security and manpower recruitment services
- Interpretation of input services under CENVAT Credit Rules, 2004
- Nexus between input services and export service

Analysis:
The appeal was filed by the Revenue against an order passed by the Commissioner (A) granting a refund on security and manpower recruitment services to the assessee. The assessee, engaged in providing "Online Data Retrieval or Access Services," filed a refund claim for unutilized CENVAT credit. The Deputy Commissioner partially allowed the refund but rejected it for certain input services, including manpower recruitment and security services. The Commissioner (A) allowed the claim for security and manpower recruitment services, leading to the Revenue filing the present appeal.

The Revenue contended that the impugned order did not properly appreciate the definition of input service under the CENVAT Credit Rules, 2004, and the conditions laid down in Notification No.5/2006 for claiming the refund. It was argued that the credit related to security agency and manpower recruitment services did not have a nexus with the export of service provided by the assessee. However, the Commissioner (A) considered these services as input services necessary for rendering the output service, as stated in the impugned order.

The impugned order highlighted the importance of manpower recruitment and security services for the business operations, emphasizing their relation with the output service. The Commissioner (A) found merit in the appellant's argument that these services were essential for the business's functioning and therefore eligible for the refund claim. The order emphasized that the lower authority had rejected the claim without providing evidence of the lack of relation between input and output services.

In conclusion, the Tribunal upheld the Commissioner (A)'s well-reasoned order, finding no infirmity in it. The appeal filed by the Revenue was dismissed, affirming the decision to grant a refund on security and manpower recruitment services to the assessee.