2019 (6) TMI 902 - AT - Service Tax

100% EOU - Refund of CENVAT credit - input services - denial of refund on the ground that the input services have no nexus with their output services - HELD THAT - Tribunal in the case of TATA CONSULTANCY SERVICES LTD VERSUS COMMISSIONER OF CENTRAL EXCISE ST (LTU), MUMBAI 2012 (8) TMI 500 - CESTAT, MUMBAI has held that services used in relation to authorized operation in SEZ would be eligible to refund under Section 11B of the Central Excise Act, 1944 as applicable to service tax vide Section 83 of Finance Act, 1994 and it cannot be denied on the ground that they were ineligible to claim the same under Notification No.09/2009-ST. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Refund of Cenvat credit on input services denied due to lack of nexus with output services.
2. Eligibility of refund of accumulated unutilized credit without challenging admissibility of credit.
3. Entitlement of SEZ unit to refund claim under specific notifications.

Analysis:
1. The appellant, a 100% EOU, sought a refund of Cenvat credit of duty on input services. Part of the refund was denied due to the alleged lack of nexus between input and output services. The Tribunal decided to dispose of all appeals based on this issue, emphasizing that the credit was availed following due procedure without objection from the Revenue. Citing precedents like the case of Commissioner of Service Tax vs. Convergys India Pvt. Ltd., the Tribunal concluded that once credit is permitted, it must be refunded without questioning its eligibility.

2. The Tribunal highlighted that since the Revenue did not challenge the admissibility of the credit when it was availed, objecting to the nexus at the time of deciding the refund application was deemed unsustainable. Consequently, all appeals filed by the assessee were allowed based on this ground.

3. Regarding the Revenue's appeals, a specific issue arose concerning the entitlement of a unit located in an SEZ to a refund claim under different notifications. The Revenue contended that the SEZ unit did not meet the conditions of Notification No.05/2006 and should have applied under Notification No.09/2009. However, the Tribunal upheld the appellant's argument that centralized registration in Noida allowed for credit availed there to cover the SEZ unit in Chennai. Citing the case of Tata Consultancy Service Ltd. vs. Commissioner of Central Excise, Mumbai, the Tribunal rejected the Revenue's appeal, affirming that services used in SEZ operations were eligible for refund under relevant laws.

In conclusion, all appeals by the appellants were allowed, while those of the Revenue were rejected, including the disposal of cross objections filed by the assessee.