2019 (5) TMI 917 - AT - Service Tax

Refund of accumulated CENVAT credit - input services - Air Travel Agent services - export of service - period January to March 2015 - HELD THAT - On perusal of those documents it apparently clear that the travel agent services were availed by appellant for the purpose of providing and exporting services for which it has registered, besides the fact that it had, with its possession all corresponding documents which could have been produced before the adjudicating authority or the Commissioner (Appeals) had the same being called for. The observation of Commissioner (Appeals) that the appellant could not produce required documents before the adjudicating authority is un-supported by factual reality. Concerning production of certificate, it is found that appellant had produced the required Chartered accountant s certificate in compliance to defect memo. Moreover exclusion clause available in 2(l) of CENVAT Credit Rules clearly mentioned that travel benefits to extend to employees on vacation such as leave or home travel concession are only excluded from the purview of availment of CENVAT credit and services which are used primarily for personal use or consumption of any employee is also excluded. In other words, services which are related to the out put services are not excluded by this definition. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Rejection of refund claim on Air Travel Agent services against CENVAT credit accumulated during export of service.

Analysis:
1. The appellant, engaged in exporting investment advisory services, filed a refund claim against unutilized CENVAT credit accumulated during a specific period. The department disallowed the refund on certain services, including Air Travel Agent service.

2. The Commissioner (Appeals) allowed the refund for membership fee service but disallowed it for Air Travel Agent service. The appellant challenged this decision regarding Air Travel Agent services before the Tribunal.

3. The rejection of CENVAT credit by the Commissioner (Appeals) was based on two primary grounds. Firstly, the services were in the exclusion clause under Rule 2(l) of the CENVAT credit rules. Secondly, the appellant failed to provide tangible evidence or invoices to establish a direct nexus between the services and the output service provided.

4. The appellant submitted various documents, including sample invoices, email communications, and travel requirements, to prove the business-related nature of the travel agent services. The appellant contended that there was a direct linkage between the input services and the services exported.

5. Upon reviewing the documents, the Tribunal found that the travel agent services were indeed availed by the appellant for providing and exporting services. The appellant had the necessary documents that could have been presented before the adjudicating authority or the Commissioner (Appeals).

6. The Tribunal concluded that the Commissioner (Appeals)' observation that the appellant could not produce the required documents was not supported by factual reality. The exclusion clause in the CENVAT Credit Rules clarified that services related to output services were not excluded from availing CENVAT credit.

7. As a result, the Tribunal allowed the appeal, set aside the Commissioner (Appeals)' order, and held the appellant eligible for CENVAT credit towards the travel agent service. The respondent department was directed to release the refund amount with applicable interest within three months.

This detailed analysis highlights the key arguments, evidence presented, legal interpretations, and the ultimate decision rendered by the Tribunal in favor of the appellant regarding the refund claim on Air Travel Agent services.