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2018 (12) TMI 92 - AT - Service TaxRefund of CENVAT Credit - input services - life insurance service - employee insurance service - rent a cab service - membership club service - Rule 5 of Cenvat Credit Rules 2004 - refund rightly rejected on the ground that the services were covered under the exclusion clause - Held that - It can be noticed that among supporting documents placed before the adjudicating authority, invoice copies of input services were placed along with cenvat credit account. Invoice cannot establish the relationship between input and output service and the scrutiny made the adjudicating authority in respect of invoices vis-a-vis abstract of cenvat credit cannot be sufficient document for the purpose of establishment of such relationship. Moreover, such scrutiny by the adjudicating authority was made in the absence of the appellant who, given an opportunity, would have been in a position to justify the same, subject to satisfaction of the adjudicating authority. It is a fit case which is required to be re-adjudicated upon with reference to production of relevant documents that would establish the linkage between input and output service and the same would ensure natural justice to the appellant also - appeal allowed by way of remand.
Issues:
Denial of refund claim against cenvat credit for various services. Analysis: The appellant challenged the denial of a refund claim for cenvat credit on services like group term life insurance, employee insurance, rent a cab, and membership club service. The appellant contended that it had availed cenvat credit on input services related to IT software and Business Auxiliary Service exported outside India. The refund application was rejected based on an exclusion clause. The appellant argued that the denial violated principles of natural justice as they were not given an opportunity to justify the credit. The appellant emphasized the need for a show-cause notice before rejecting the claim. The respondent department defended the order, citing the exclusion clause barring certain services from cenvat credit. During the hearing, it was noted that the appellant was not given a chance to establish the linkage between input and output services. The denial of a significant amount of the claim was found to lack proper justification in the order-in-original. The Commissioner (Appeals) did not provide the appellant with a notice before rejecting the claim, disregarding principles of natural justice. The appellant's arguments regarding the services not falling under the exclusion clause were overlooked. The documents submitted, including invoices, were deemed insufficient to establish the relationship between input and output services. The exclusion clause was found to be qualified and dependent on personal use, requiring a re-adjudication with the production of relevant documents to ensure natural justice. The Tribunal allowed the appeal, setting aside the Commissioner (Appeals) order and remanding the matter for fresh adjudication. The appellant was instructed to provide relevant documents and participate in a personal hearing during the re-adjudication process to establish the linkage between input and output services effectively.
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