2020 (3) TMI 318 - AT - Service Tax

Refund of CENVAT Credit - Rejection of refund on some services on the ground that some of the services have not been actually gone into consumption for provision of output services and on the ground that the documents/invoices submitted did not mention the description properly or no nexus - HELD THAT - In innumerable decisions of the Tribunal it has been held that Event Management Service which is procured for the purpose of business development meetings and events to plan strategy for the future development etc. is qualify as input service and therefore eligible for credit. These kind of events are essential to keep the employees motivated, committed and to foster relationships. Thus these services are actually procured in relation to the business which helps them in improving interpersonal skills, rejuvenate, increase efficiency and to improve their performance in the business. Similarly the short term accommodation was required by the Appellants for its employees official visits to other locations for business operations/ meetings and therefore this service is also eligible for credit. The other services viz. storage and packing, Management, Maintenance Repair, Business Auxiliary Service and Business Support Services were rejected on the ground of either no nexus or description not properly mentioned on the invoices. In the instant matter no serious discrepancy has been noticed or pointed out by the learned Commissioner while rejecting the claim. Incomplete name or description of services appearing in invoices is clerical error and that does not mean that the appellant have not received and used the services and for this reason Cenvat credit/refund cannot be denied. It has also been established by the Appellants that none of the above services were used by the Appellants for the personal use of its employees. Therefore in my view the aforesaid service very well fall within the inclusive definition of input service as defined in Rule 2(l) of the Cenvat Credit Rules, 2004. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection on various services under the Software Technology Park of India Scheme.

Analysis:
The appeal challenged an order rejecting a refund claim of ?11,62,00,568/- for Cenvat Credit of Service Tax paid on input services. The Adjudicating Authority sanctioned a refund of ?11,39,25,548/- but rejected ?22,75,020/- due to services not consumed for output services and document discrepancies. On appeal, the Commissioner partly allowed the appeal, refunding ?18,53,371/-, maintaining the rejection of ?4,49,164/- for lack of nexus or proper description on invoices.

Event Management Service:
The appellant's claim on Event Management Service was rejected, contending it was essential for business development meetings and events. The Tribunal held such services qualify as input services, crucial for employee motivation, commitment, and business relationships.

Short Term Accommodation Service:
The rejection of the claim for Short Term Accommodation Service was based on insufficient tangible documents. However, the Tribunal found the service eligible as it was necessary for employees' official visits to other locations for business operations and meetings.

Storage, Packing, Maintenance, Repair, Business Auxiliary, and Support Services:
The rejection of these services' claims was due to alleged lack of nexus or improper description on invoices. The Tribunal ruled in favor of the appellant, establishing the nexus and emphasizing that procedural lapses should not deny substantive benefits. Any discrepancies in documents were considered clerical errors and did not invalidate the service usage.

The Tribunal emphasized the inclusive definition of input services under Rule 2(l) of the Cenvat Credit Rules, 2004. It concluded that the appellant was eligible for the refund of accumulated Cenvat Credit as an exporter of services. The appeal was allowed, granting consequential relief to the appellant.