2019 (12) TMI 234 - AT - Service Tax

Refund claim of the accumulated CENVAT Credit - input services - export of goods General Insurance service - Club or Association service - Banking and Financial service - Telephone service - Legal Consultancy service - Management, Repair Maintenance service - denial on account of nexus - HELD THAT - The learned Commissioner (Appeals) has rejected the refund claim observing that the Appellants failed to establish by adducing the documentary evidences that there has been nexus between the input service and output service, on which the refund has been claimed during the relevant period - The learned Advocate submits that the said documents have been filed on 29.08.2017 after conclusion of hearing before the learned Commissioner (Appeals). However, the same were not considered since the order was passed on 31.08.2017. The matter to be remanded to the learned Commissioner (Appeals) to consider the document/evidences produced by the Appellant in support of their claim that there has been nexus between the input service and output service, which were ultimately used in the export services, hence eligible to refund of the accumulated CENVAT Credit - Appeal allowed by way of remand.

Summary

Issues:
Refund claim of accumulated CENVAT Credit under Rule 5 of CENVAT Credit Rules, 2004 - Rejection of refund claim by Commissioner (Appeals) - Nexus between input services and output services for export - Consideration of documentary evidence by Commissioner (Appeals) - Appeal for remand.

Analysis:
The appeal was filed against the Order-in-Appeal passed by the Commissioner (Appeals-II), CGST & C.E., Mumbai, concerning the denial of refund of accumulated CENVAT Credit. The Appellants had availed CENVAT Credit on various input services used in providing taxable output service ultimately exported by them. The refund claim for a specific period was partially allowed by the Commissioner (Appeals), leading to the present appeal.

The Appellant contended that the input services for which credit was denied were indeed used in providing the output service exported by them. The denial of credit by the authorities was challenged on the grounds that there was a clear nexus between the input services and the output services, making the denial unlawful. On the other hand, the Revenue argued that the refund claim was rejected due to a lack of evidence establishing the connection between the input services and the output services as claimed by the Appellant.

During the proceedings, the Appellant highlighted that all relevant documents supporting the refund claim, including those demonstrating the nexus between input and output services, were submitted to the Commissioner (Appeals) before the order was passed. However, these documents were allegedly not considered in the final decision, which was issued shortly after the submission of evidence.

Upon careful consideration of the arguments presented by both parties and a review of the records, it was observed that the Commissioner (Appeals) had rejected the refund claim based on the Appellants' failure to prove the nexus between the input and output services through documentary evidence. The Appellant's submission that crucial documents were submitted before the Commissioner (Appeals) but not considered due to the timing of the order was acknowledged.

In light of the circumstances, the judgment concluded that the impugned order should be set aside, and the matter remanded to the Commissioner (Appeals) for a reevaluation. The Commissioner (Appeals) was directed to reconsider the documentary evidence provided by the Appellant to establish the nexus between the input services and the output services used in the export transactions, thereby determining the eligibility for the refund of accumulated CENVAT Credit.

Ultimately, the appeal was allowed, and the case was remanded to the Commissioner (Appeals) for further consideration in accordance with the observations made during the judgment.