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2019 (1) TMI 1428 - AT - Central Excise100% EOU - Refund claims of unutilized / accumulated CENVAT - deemed exports or not - Rules 5 of CCR, 2004 read with Notification No.27/2012 dated 18.6.2012 - input services - Gardening/Landscaping services - Design Services - Retainership Fee (Auditor Services) - Outdoor catering service - Tea/Coffee Machine Maintenance - denial on account of nexus. Gardening/Landscaping services - Design Services - Retainership Fee (Auditor Services) - Held that - The services have been held to be input service by the decisions relied upon by the appellant - reliance placed in the case of Orient Bell Ltd. vs. CCE 2017 (1) TMI 840 - CESTAT ALLAHABAD - Therefore, the rejection of refund on these services on account of lack of nexus is not sustainable - refund allowed. Outdoor Catering Services - Held that - After the amendment, the input service specially excludes it from the definition of input service - refund cannot be allowed. Tea/Coffee Machine Maintenance - Held that - The appellant did not press for this - refund rejected. The appeals are remanded back to the original authority for quantification and sanctioning of refund - appeal allowed by way of remand.
Issues:
Refund claims of unutilized CENVAT credit; rejection of cash refund for various services; interpretation of input services under CENVAT Credit Rules, 2004. Refund Claims of Unutilized CENVAT Credit: The appellants, a 100% EOU registered under Central Excise for manufacturing RF Microwave Components, filed refund claims under CENVAT Credit Rules, 2004. The original authority partially rejected the claims but allowed re-credit on deemed exports and partially sanctioned the refund claims. The Commissioner (A) further examined the issue and held that cash refund for clearances to other EOUs needed re-examination based on precedent decisions, while credit for other activities was limited to courier services. The appellants challenged this decision in their appeals. Rejection of Cash Refund for Various Services: The appellants contested the denial of cash refund for services like Gardening/Landscaping, maintenance of tea and coffee machines, survey of land, design services, and retainership fee services. The learned counsel argued that the denial based on lack of nexus was unsustainable in law. Referring to the definition of input services post-amendment from 1.4.2011, the counsel asserted that the denied services fell within the definition of input services as established by various Tribunals and High Courts. Specific services like Gardening/Landscaping and Design services were supported by relevant case law. Interpretation of Input Services under CENVAT Credit Rules, 2004: The learned counsel emphasized that input services should be construed broadly, linking them directly or indirectly to the manufacturing process to allow credit. Cases were cited where services like Gardening/Landscaping, Design services, and Retainership Fee (Auditor Services) were recognized as input services. However, the argument for Outdoor Catering Services was countered based on a Larger Bench decision excluding it from the definition of input services post-amendment. The Tea/Coffee Machine Maintenance Service was not pursued for refund by the appellant. Judgment: After considering arguments from both parties and reviewing relevant case law, the Judicial Member found that services like Gardening/Landscaping, Design Services, and Retainership Fee (Auditor Services) qualified as input services based on established precedents. The rejection of refund on these services for lack of nexus was deemed unsustainable. However, Outdoor Catering Services were excluded from the definition of input services post-amendment, and the Tea/Coffee Machine Maintenance Service refund claim was not pursued. Consequently, the appeals were allowed for the services deemed as input services, and the matter was remanded back to the original authority for quantification and sanctioning of refund.
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