2018 (2) TMI 1129 - HC - Service Tax

CENVAT credit - input services - rejection was on the ground that there were 21 services which were held to be not used in providing output services, and hence not classifiable as input service under Rule 2(1) of the Cenvat Credit Rules. The other reason was that Cenvat Credit was availed on the input services but against input invoice which pertains to the period prior to registration. Held that - the scope of admissibility of input services is now broadened to include input services used for providing output services. The Tribunal found that the appellate authority had rightly concluded that the input services are used for providing output services. The definition was referred and a factual finding is recorded viz. that all input services used for modernization, renovation or repair to the office premises are also covered. Even the advertising service which was questioned was also held to be an input which would qualify as an input service and used for providing output service. The Tribunal then noted that wherever the employees have contributed to the supply of food service, to that extent, the employer assessee before it has already conceded that it is not covered within the definition. We wonder as to why Revenue brings appeals after appeals to this Court, and gets them routinely dismissed. The volume does not impress us and merely because 21 services are in issue means nothing to us. So long as the Tribunal s order is within the parameters of law, and cannot be termed as perverse or shocking, the judicial conscience of this Court otherwise, we do not interfere therewith even if other view is possible. Appeal dismissed.

Summary

Issues involved:
1. Interpretation of input services in relation to exported services.
2. Admissibility of service tax credit for various services.
3. Application of legal tests in determining eligibility for input services.
4. Judicial review of Tribunal's decision on input services.
5. Rejection of refund claims based on input services classification.
6. Consideration of registration date in refund eligibility.
7. Grounds for dismissing Revenue's appeal.

Analysis:
1. The High Court addressed the issue of interpreting input services concerning exported services. The Court referred to the case of Commissioner of Central Excise Vs. Ultratech Cement Ltd. to support the assessee's position, emphasizing the direct correlation between input services and exported services.

2. The Court examined the admissibility of service tax credit for various services, including advertising, manpower recruitment, transport, and food services. The Tribunal analyzed each service to determine if it falls under the definition of "input services" or "activities resulting to business," with a concession made regarding employee-contributed food expenses.

3. Legal tests were applied by the Tribunal to assess the eligibility of the 21 services as input services used in providing output services exported without service tax payment. The Court highlighted the broadened scope of admissibility for input services and upheld the Tribunal's decision based on legal tests and authoritative pronouncements.

4. The High Court reviewed the Tribunal's decision on input services and found that the Revenue's appeals lacked merit as the Tribunal's order was within legal parameters. The Court emphasized that as long as the order is not perverse or shocking, interference is unwarranted, even if an alternative view is possible.

5. The rejection of refund claims was based on the classification of 21 services not used in providing output services, leading to the denial of Cenvat Credit under the Cenvat Credit Rules. The Court noted the Revenue's desperate attempts to challenge the order without proper grounds, which was rightfully discarded.

6. The Court considered the registration date of the assessee in 2008 as a non-factor in denying the refund, indicating that the registration status did not impact the eligibility for refund claims.

7. The High Court dismissed the Revenue's appeals, emphasizing that the Tribunal's decision was legally sound, and no substantial question of law warranted further interference. The Court upheld the Tribunal's decision on input services and concluded that each appeal failed based on the previous judgment in Central Excise Appeal No.169 of 2015.