2018 (7) TMI 77 - AT - Service Tax

100% EOU - Refund for unutilized cenvat credit - rejection on the ground of time limitation, non-registration of premises, nexus of input services with output services and also on the ground that the adjudicating authority added the turnover of the SEZ units also thereby reducing the eligibility of the refund amount - Held that - In the case of service providers exporting 100% of their services, there should not be any dispute with regard to time bar - refund claim is not hit by time bar. Refund claim rejection on the ground of non-registration of premises - Held that - The issue whether respondent is eligible for credit before registration of the premises is decided in the case of m-Portal India Wireless Solutions P. Ltd. Vs CST Bangalore 2011 (9) TMI 450 - KARNATAKA HIGH COURT , where it was held that Registration not compulsory for refund. Refund claim rejection on the ground of addition of turnover of the SEZ units to that of the total turnover of the respondent - Held that - The formula applied by the Commissioner (Appeals) excluding the turnover of the SEZ units is correct and proper. Refund claim denial on the ground of nexus - input services - outdoor catering services - Rent-a-cab services - Held that - The period involved is prior to 1.4.2011 and the definition of input services during the relevant period had a wide ambit as it included the words activities relating to business - the Tribunal as well as the Courts have held that the said services are eligible for credit if it is established from records that assessee has used the said service for providing the output services - refund allowed. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Refund claim rejection by original authority.
2. Time bar for refund claims.
3. Eligibility for credit before premises registration.
4. Inclusion of SEZ units turnover in total turnover.
5. Credit eligibility for Rent-a-cab and outdoor catering services.

Refund Claim Rejection:
The appeals were filed by the department against the Commissioner (Appeals) order setting aside the original authority's rejection of the refund claim by the respondent. The original authority rejected the claim citing various grounds, including time bar, availing credits before premises registration, and ineligibility of certain credits. The respondent, a 100% EOU, filed for a refund of unutilized cenvat credit under the Cenvat Credit Rules, 2004. The Ld. Consultant for the respondent argued that the Commissioner (Appeals) rightly analyzed the issues and case laws, granting the refund based on those precedents.

Time Bar for Refund Claims:
The Ld. Consultant for the respondent referred to Board Circular No. 120/01/2010-ST, stating that quarterly filing of refund claims without any bar in the notification should not pose a time bar issue. Considering service providers exporting 100% of their services, the Tribunal held that there should be no dispute regarding time bar. The Commissioner (Appeals) rightly granted relief, ruling that the refund claim was not time-barred.

Eligibility for Credit Before Premises Registration:
The issue of credit eligibility before premises registration was decided in a previous case, m-Portal India Wireless Solutions P. Ltd. Vs CST Bangalore. Following this precedent, the Tribunal ruled in favor of the respondent, allowing credit before premises registration.

Inclusion of SEZ Units Turnover:
Regarding the inclusion of SEZ units turnover in the total turnover, the Commissioner (Appeals) correctly excluded the turnover of the SEZ units. The Tribunal found this approach appropriate and upheld the decision.

Credit Eligibility for Rent-a-Cab and Outdoor Catering Services:
For credits on services like outdoor catering and Rent-a-cab services, the Tribunal noted that the definition of 'input services' during the relevant period included "activities relating to business." Previous decisions by the Tribunal and Courts established that these services are eligible for credit if used for providing output services. Therefore, the Commissioner (Appeals) decision to allow credit on these services was deemed sustainable. Consequently, the department's appeals were dismissed as no grounds for interference were found.

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