2018 (12) TMI 171 - HC - Service Tax

Refund of Cenvat Credit - necessity of various input services - export of services - event management services - pandal or shamiana contractor s services - mandap keeper services - health and fitness services - denial of refund on the ground of nexus with output service - Held that - The only requirement under the Cenvat Credit Rules 2004 to satisfy the definition on input services is the use in providing of output services. Therefore where the input services are used in providing output services and there is some nexus then invoking the test of necessity would be adding words to the rule which is not permissible in a fiscal statute - Tribunal has come to the view that all the above services have nexus and have been used in providing output services - appeal dismissed.

Summary

Issues:
Challenge to order of Customs, Excise and Service Tax Appellate Tribunal regarding refund of tax on input services for exported output services.

Analysis:
The appeal under Section 83 of the Finance Act challenges the Tribunal's order allowing refund of tax on input services for exported output services. The Revenue questions whether the Tribunal was justified in holding that event management services, pandal or shamiana contractor's services, mandap keeper services, and health and fitness services qualify as input services with nexus to exported output services. The Tribunal allowed the refund but referred the issue of quantification and verification back to the adjudicating authority.

The Revenue argues that the mentioned input services are not related to the export of services by the respondent. However, the Tribunal found that these services were indeed used in providing output services and established a nexus between input and output services. The Tribunal's decision was based on the use of these services in the respondent's business and the nexus between them. It rejected the Revenue's argument that input services must be necessary for providing output services, stating that the legislative mandate only requires the use of input services in providing output services. The Tribunal's conclusion was deemed reasonable, and the appeal was dismissed without costs.

Therefore, the Tribunal's decision to allow the refund of tax on input services for exported output services was upheld, as it was found to be based on a reasonable interpretation of the law and the facts presented.