2018 (2) TMI 927 - AT - Service Tax

100% EOU - Refund claim - Renting of Immovable Property for parking space - Supply of Tangible Goods for Cafeteria - rejection on the ground that the services for which they filed refund claim are not input services as per Rule 2(l) of the CCR 2004 - Held that - the Renting of Immovable Property for parking space is a part of the output service as without that space the persons visit to the office of the appellant cannot reach to the office and for that purpose, the parking space is required. Therefore, these parking space is necessary for providing the output services of the appellant - refund allowed. Supply of Tangible Goods for Cafeteria - Held that - the employees of an output service provider are required to avail the services of the cafeteria which is essential for the employees. If cafeteria services have not been provided to the employees, the efficiency of the employees shall come down as they have to go outside the premises for cafeteria and they will not able to work in their full capacity - refund allowed. Also, refund claim cannot be denied merely on the premise that services in question on which cenvat credit remained unutilized in cenvat credit are not Input Services . Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Rejection of refund claim based on services not being classified as input services under Rule 2(l) of the Cenvat Credit Rules, 2004.

Analysis:
The appellants appealed against the rejection of their refund claim, contending that the services for which the claim was filed were not recognized as input services under Rule 2(l) of the Cenvat Credit Rules, 2004. The Revenue argued that services like Renting of Immovable Property for Parking Space and Supply of Tangible Goods for cafeteria did not qualify as input services, hence the refund claims were dismissed. The case was brought before the tribunal for review.

The tribunal noted that the Renting of Immovable Property for parking space was crucial for the appellant's output services as it facilitated visitors' access to the office premises. Therefore, the parking space was deemed necessary for providing the appellant's services, making it eligible for cenvat credit. Similarly, for the Supply of Tangible Goods for Cafeteria, it was established that the cafeteria services were essential for the employees' efficiency. Without the cafeteria on-site, employees would have to leave the premises, affecting their productivity. Consequently, the tangible goods supplied to the cafeteria were considered eligible for cenvat credit under Rule 2(l) of the Cenvat Credit Rules, 2004.

Moreover, the tribunal observed that the services in question were not disputed as input services at the time of availing them. The issue arose only during the refund claim process under Rule 5 of the Cenvat Credit Rules, 2004. Citing the decision in Technip India Ltd., it was held that the denial of a refund claim solely on the basis of services not being classified as input services, especially when cenvat credit remained unutilized, was not justified. Therefore, the tribunal concluded that the appellants were entitled to the refund claim under Rule 5 of the Cenvat Credit Rules, 2004. Consequently, the impugned orders were set aside, and the appeals were allowed with any consequential relief.

In summary, the tribunal ruled in favor of the appellants, emphasizing that the services in question were integral to their output services and thus qualified as input services for cenvat credit purposes. The denial of the refund claim based solely on the classification of services was deemed unjustified, leading to the reversal of the earlier decisions and granting relief to the appellants.