2019 (5) TMI 1292 - AT - Service Tax

Refund of unutilized CENVAT Credit - input services - Construction Services - rejection on the ground that no documentary evidence was filed to substantiate the nature of work involved and that no nexus established between input service and the output - HELD THAT - There is force in the contention of the appellant that the requirement of establishing nexus between input service and the output has been done away with by the Board itself vide D.O.F. No. 334/1/2012-TRU dated 16.03.2012. There is no requirement to demonstrate the nexus between the input services and the output - Construction Services were used in modernization and renovation of the premises has not been doubted by the Revenue - refund allowed. CENVAT credit - input services - Interior Decorator Services - HELD THAT - The authorities below have held that the same was not an input service covered by the inclusive part of the definition and not even under the illustration of activities relating to business as defined under Rule 2(l) of the CCR, 2004; that Interior Decorator Service was nowhere related to the registered output service. The authorities below therefore rejected the refund holding that there was no nexus between the input and the output, with Interior Decorator Service not being a must for carrying out the appellant s output service. Input services - Works contract service - HELD THAT - Though the appellant has given details which are also noted by the adjudicating authority, the said contention has not been held to be wrong, but the only reason for denial is that the same was excluded by Rule 2(l) ibid. On going through the definition in terms of Rule 2(l) ibid as amended with effect from 01.04.2011, I find that the provision makes it clear that the services utilized in relation to modernization, renovation and repair of the factor would definitely fall within the meaning of input services even though the construction of a building or of a civil structure or part thereof is placed under the exclusion clause - Board vide Circular No. 943/04/2011-CX dated 29.04.2011 clarified that the input service used in modernization, renovation or repair has been clarified to be eligible for credit. Input services - Air Travel Services - denial on the ground that the appellant was unable to establish the nexus - HELD THAT - The Board itself has clarified vide D.O.F. No. 334/1/2012-TRU dated 16.03.2012, which is binding on the authorities below and the authorities below having not followed, the impugned order cannot sustain - Credit allowed. Input services - Rent-a-Cab Services - appellant submits that it was not an issue taken up for adjudication and therefore, the Commissioner (Appeals) has gone beyond the scope of both the Show Cause Notice as well as the adjudication order - HELD THAT - After going through the orders of the lower authorities, the same was never an issue right from the beginning, the same was also not even a part of the grounds of appeal urged before the first appellate authority and also before this forum. Therefore, no order is passed. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Appeals against common Orders-in-Appeal; Refund claims under CENVAT Credit Rules; Rejection of refund for Construction Service, Interior Decorator Service, Works Contract Service, Air Travel Service, and Rent-a-Cab Service.

Construction Service Issue:
The appellant filed refund claims for Construction Service under CENVAT Credit Rules. Authorities rejected the refund citing lack of evidence and nexus between input service and output. The appellant argued that modernization and renovation of premises qualify as input services. The Tribunal noted that the requirement to demonstrate nexus was done away with by the Board. Previous decisions supported the appellant's claim. The rejection was set aside as the appellant was entitled to the refund.

Interior Decorator Service Issue:
Refund for Interior Decorator Service was rejected as not related to registered output service. The appellant argued that it was essential for premises' upkeep. The Tribunal referenced a High Court decision supporting the inclusion of such services as input services. Following precedent, the denial of refund was set aside.

Works Contract Service Issue:
Authorities denied refund for Works Contract Service based on the exclusion clause in CENVAT Credit Rules. The appellant contended that these services were used for modernization and renovation, supported by relevant orders and circulars. The Tribunal agreed that such services fell within the definition of input services despite the exclusion clause. Previous decisions and circulars clarified eligibility for credit. The rejection was set aside.

Air Travel Service Issue:
Refund for Air Travel Service was denied due to failure to establish nexus. The Tribunal noted a Board clarification that was binding on authorities. As the authorities did not follow the clarification, the denial of refund was set aside.

Rent-a-Cab Service Issue:
Rent-a-Cab Service was not adjudicated upon, and the Commissioner's decision went beyond the scope of the case. The issue was never raised or part of the appeal. Therefore, no order was passed on this issue.

In conclusion, the Tribunal allowed the appeals of the assessee concerning the rejection of refunds for Construction Service, Interior Decorator Service, Works Contract Service, and Air Travel Service. The decisions were based on the lack of nexus requirement, previous judgments, and relevant circulars. The Rent-a-Cab Service issue was not addressed due to it not being part of the original scope.