2017 (11) TMI 1403 - AT - Service Tax

Refund of unutilized CENVAT credit - input services - advertisement service - renting of immovable of property service for car parking - cafeteria; health and fitness service - event management service - development and supply of content service - legal consultancy service - interior design service - video production agency service - Held that - except for health and fitness service, with regard to all other services for the subsequent period, it has been held by the authorities below that these are input services and refund claims were sanctioned. Therefore, Revenue cannot take contrary stand to deny CENVAT credit when they hold that the services in question are input services - refund allowed. Health and fitness service - Held that - Admittedly, these services have been received by the appellant in the course of their business of providing output service, therefore for that period, the appellant is entitled to avail CENVAT credit on health and fitness service - refund allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of refund claims under Rule 5 of CENVAT Credit Rules, 2004.
2. Determination of whether certain services availed by the appellant qualify as input services under Rule 2(l) of CENVAT Credit Rules, 2004.
3. Entitlement to CENVAT credit on health and fitness service based on the period of availing the service.
4. Consideration of objections raised by authorities during the availment of CENVAT credit in relation to the filing of refund claims.

Analysis:
The Appellate Tribunal CESTAT BANGALORE addressed the appeals where refund claims under Rule 5 of CENVAT Credit Rules, 2004 were rejected by the lower authorities. The appellant, an output service provider, availed various services for supplying output services. The contention arose regarding the qualification of these services as input services under Rule 2(l) of CENVAT Credit Rules, 2004, leading to the rejection of refund claims. The Tribunal noted that while most services were deemed as input services by the authorities, an exception was made for health and fitness service.

Regarding the health and fitness service, the Tribunal referred to a decision by the Hon’ble High Court of Bombay, establishing that CENVAT credit could be availed on input services utilized in providing taxable output services. As the health and fitness service was received during the course of the appellant's business of providing output services, the Tribunal concluded that the appellant was entitled to claim CENVAT credit for that specific period. Importantly, it was highlighted that objections against availing CENVAT credit on the services were not raised during the initial availment, thus supporting the appellant's right to claim the credit during the refund process.

Consequently, the Tribunal held that the impugned orders lacked merit and set them aside. The refund claims of the appellant were allowed, and the appeals filed by the appellant were granted. The judgment emphasized the importance of consistent treatment of services as input services and upheld the appellant's right to claim CENVAT credit based on the established legal principles.