2018 (10) TMI 1070 - AT - Service Tax

100% EOU - Refund of unutilized CENVAT Credit - CVD paid on capital goods - service tax paid on Air Travel Agent service - Rule 5 of the Cenvat Credit Rules, 2004 - denial of refund also on the ground that requirements of Rule 9 (6) of the rules not complied with. Service tax paid on Air Travel Agent service - Held that - Rule 5 specifies the formula for claiming refund of service tax paid on the input services. On reading of the said rule, it transpires that there is no specific mention that the taxable service should conform to the requirement of Rule 2 (l) for consideration, whether such service is a input service or not and whether, such service has the nexus with the output service - Since Rule 5 of the rules is silent on these aspects, the denial of refund benefit for air travel agent service on the ground that the said service does not qualify as input service, shall not stand for judicial scrutiny - denial of refund not justified. Refund of CVD amount paid on the capital goods - Held that - The appellant admits that it is not entitled for refund of CVD amount paid on the capital goods - the impugned order, denying the refund benefit of CVD amount cannot be interfered with. Refund benefit denied on the ground that the requirements of Rule 9 (6) of the rules have not been complied - Held that - It is evident that there are contradictions between the findings vis-a-vis the submissions. Thus, in order to meet the ends of justice, the matter should be remanded to the original authority for a proper fact finding, whether the requirement of Rule 9 (6) of the rules have in fact been complied with by the appellant in true letter and spirit. Appeal allowed in part and part matter on remand.

Summary

Issues Involved:
Refund claims under Rule 5 of the Cenvat Credit Rules, 2004 for accumulated Cenvat Credit; Denial of refund benefits for specific input services and CVD on capital goods; Compliance with Rule 9(6) requirements for refund claims.

Analysis:
The judgment dealt with the appellant, a 100% EOU providing back office services, seeking refund of accumulated Cenvat Credit under Rule 5 of the Cenvat Credit Rules, 2004. The appellant exported all output services to its group companies globally. The original authority allowed refund on some input services but denied it on others, including CVD on capital goods and Air Travel Agent service, citing non-compliance with Rule 2(l) and Rule 9(6). The Commissioner (Appeals) upheld the denial, leading to the appeal.

The appellant argued that Rule 5 allows refund of accumulated Cenvat Credit for exported services without specifying the need to confirm input services as per Rule 2(l). The denial of refund for Air Travel Agent service was challenged. However, the appellant conceded the denial of CVD refund. The appellant contended that compliance with statutory requirements entitled them to the refund.

The revenue authority supported the findings of the impugned order, emphasizing the conditions for refund eligibility under Rule 5 and the nexus between input and output services. The Tribunal analyzed Rule 5, noting its silence on confirming input services under Rule 2(l) or establishing nexus with output services. It held that denial of refund for Air Travel Agent service based on it not qualifying as an input service was unjustified.

Regarding CVD refund denial, the Tribunal upheld the impugned order as the appellant acknowledged ineligibility. However, on the non-compliance with Rule 9(6), the Tribunal found contradictions between the findings and appellant's submissions. It remanded the matter to the original authority for proper fact-finding on Rule 9(6) compliance, emphasizing the appellant's active participation in the proceedings.

The Tribunal disposed of the appeals by allowing refund on Air Travel Agent service, setting aside the denial, sustaining the CVD refund denial, and remanding other issues for fresh adjudication to ensure compliance with Rule 9(6) requirements.