2019 (12) TMI 124 - AT - Service Tax

Refund of the unutilized CENVAT credit - input services - Business Support Services - Clearing and Forwarding Services - Management Consultant Service - Manpower Recruitment Services - Renting of Immovable Property services - Rent-a-Cab services - Insurance services - Business Auxiliary and Cleaning / Housekeeping services - Commercial Training and Coaching services - Club or Association Services - HELD THAT - It is seen from the definition of input services that when the services have been used for providing output service, the same are eligible for credit. In the present case, the department does not allege that these services were not used by the appellant. Event management service - HELD THAT - On perusal of invoices, it can be seen that the amount has been incurred only for the training for fire and safety measures and not for any outdoor catering service. Further, the club or association service have been availed for obtaining membership in NASSCOM, American Chamber of Commerce and International Market Assessment - refund allowed. Rent-a-cab service - HELD THAT - The credit is denied for this service as the appellant is not disputing the claim in respect of rejection of refund in regard to rent-a-cab service. The impugned order is modified to the extent of allowing the credit /refund in respect of these services given except rent-a-cab service - Appeal allowed in part.

Summary

Issues involved:
Refund claim under Rule 5 of CENVAT Credit Rules, 2004 for unutilized CENVAT credit for various input services.

Analysis:
The appellants, engaged in providing BPO services, filed refund claims for unutilized CENVAT credit which were partially rejected by the authorities. The rejected services included Business Support Services, Clearing and Forwarding Services, Management Consultant Service, Manpower Recruitment Services, Renting of Immovable Property, Rent-a-Cab, Insurance, Business Auxiliary and Cleaning/Housekeeping services, Commercial Training and Coaching, and Club or Association Services. The rejection was based on the authorities' assertion that these services lacked a nexus with the output service provided by the appellants. The consultants for the appellants argued that all the services were used for providing output services and therefore eligible for credit/refund. They highlighted that the renting of immovable property was essential for carrying out output services, and insurance services were obtained to cover director's liability risks. They also clarified that event management services were utilized for training purposes, not for event hosting. The consultants referenced relevant legal definitions and previous decisions to support their arguments.

The authorities rejected the refund claims, contending that the appellants failed to establish a clear nexus between the input services and the output services. The appellant's consultants argued that all the services in question were indeed utilized for providing output services, and therefore, eligible for credit/refund. They presented detailed justifications for each service, emphasizing their relevance to the business operations and output services provided. The consultants referenced legal definitions and previous legal decisions to support their arguments, asserting that the department had no grounds to deny the refund claims.

After hearing both sides and considering the explanations provided, the tribunal found the rejection of the refund claims unjustified. The tribunal noted that the rejected services were indeed used for providing output services, as demonstrated by the detailed explanations and supporting evidence presented by the appellants. The tribunal referenced previous legal decisions and concluded that, except for rent-a-cab service, all the other services were eligible for credit/refund. The impugned order was modified to allow credit/refund for the services listed in the table provided, with the appeals partly allowed in favor of the appellants.