2018 (3) TMI 774 - AT - Service Tax

Refund of unutilized CENVAT credit - Rule 5 of CCR - input services - Event Management Service - car parking services - denial on account of nexus - Held that - the period involved is prior to 1.4.2011 when the definition of input service had a wide ambit. It is also brought from the records that Event Management Service was availed by the assessee for the purpose of sales promotion. So also, the car parking was availed for the purpose of giving parking facilities to the employees as well as the management - The denial of credit stating that these services do not have nexus with the output services provided is not justified. CENVAT credit - Duty paying documents - debit notes - Held that - The Tribunal in the case of Ad-Magnum Packaging Pvt. Ltd. 2017 (4) TMI 209 - CESTAT NEW DELHI has held that debit notes are valid documents for availing credit provided it contains all requisite information as prescribed in Rule 9 (1) of Cenvat Credit Rules, 2004 - debit notes are valid documents for availing credit and rejection of refund on this ground is unjustified - For the limited purpose of verifying whether the credit availed on these debit notes is proper as to payment of service tax and other details, the matter is remanded to the adjudicating authority. Appeal allowed in part and part matter on remand.

Summary

Issues:
Refund claims under Rule 5 of the Cenvat Credit Rules, 2004 for unutilized cenvat credit - Denial of refund for credit availed on Event Management Services, Renting of Immovable Property services for car parking, and credit availed on debit notes.

Analysis:
The batch of appeals involved in this case pertains to refund claims under Rule 5 of the Cenvat Credit Rules, 2004 for unutilized cenvat credit. The assessee, engaged in providing export services, had filed refund claims that were partly sanctioned by the refund authority. However, certain claims were rejected, leading to appeals before the Commissioner (Appeals). The Commissioner allowed the refund for some issues but upheld the rejection for credit availed on Event Management Services, Renting of Immovable Property services for car parking, and credit availed on debit notes. The Tribunal heard the appeals together and analyzed the issues in detail.

The first issue addressed was the denial of refund for credit availed on Event Management Services and Renting of Immovable Property services for car parking. The Tribunal noted that the services were availed in the course of the assessee's business activities, making the credit admissible. Citing precedents like the case of Ultra Tech Cement Ltd. Vs CCE, the Tribunal held that the denial of credit based on the lack of nexus with output services was unjustified. Therefore, the credit availed on these services was deemed eligible and admissible.

The second issue focused on the rejection of refund for credit availed on debit notes. The Tribunal referred to the case of Ad-Magnum Packaging Pvt. Ltd. and Vodafone Essar Spacetel Ltd., emphasizing that debit notes are valid documents for availing credit if they contain the necessary information as per Rule 9(1) of the Cenvat Credit Rules, 2004. While acknowledging the Commissioner's observation regarding the lack of necessary particulars in the debit notes, the Tribunal deemed the rejection of refund on this ground unjustified. The matter was remanded to the adjudicating authority for verification of the credit availed on debit notes to ensure compliance with service tax payment and other details.

In conclusion, the Tribunal allowed the appeals filed by the assessee concerning the issues of credit availed on Event Management Services, Renting of Immovable Property services for car parking, and credit availed on debit notes. The appeals filed by the department were dismissed, with the impugned order modified only regarding the issues related to credit availed on debit notes, without affecting other findings and directions of the Commissioner (Appeals).