2021 (4) TMI 517 - AT - Service Tax

Refund of the unutilized credit - inputs and input services used for providing output services - Cleaning Service - Plant Rental Charges - Freight Charges - Installation Charges - Pest Control Charges - Car parking charges terrace charges terrace and car-bike charges - Auditorium Charges - Event Management Charges - Purchase of air conditioning Civil Work - Membership subscription. Cleaning Service - HELD THAT - In the case of M/S HCL TECHNOLOGIES LTD VERSUS C.C.E. NOIDA 2015 (8) TMI 595 - CESTAT NEW DELHI it has been clearly held that Cleaning Services are essential for providing output services and therefore the same would qualify as input service and hence eligible for refund - the denial of CENVAT Credit on this service is bad. Plant Rental Charges - HELD THAT - The appellant did not file any details as to the nature of service. However it is seen that since services of renting of equipments for organizing events are allowed as valid input service the same logic should apply here and accordingly in principle the denial of CENVAT Credit is held bad - The Delhi Bench of the CESTAT in the case of M/S HCL TECHNOLOGIES LTD VERSUS C.C.E. NOIDA 2015 (8) TMI 595 - CESTAT NEW DELHI has held so. Freight Charges - HELD THAT - Freight Charges are included in the inclusive part of the definition of input service under Rule 2 (l) of the CENVAT Credit Rules 2004 and hence the denial by the lower authorities is bad. The impugned order to this extent is set aside and this ground is allowed. Installation Charges - only ground for rejection by the lower authorities is the non-furnishing of any details - HELD THAT - Since no details were furnished this issue requires re-adjudication. Accordingly the impugned order to this extent is set aside and the matter is remanded to the file of the Adjudicating Authority to verify the details and follow the guidelines - this issue is allowed by way of remand. Pest Control Charges - HELD THAT - The assessee has claimed that this issue is akin to Cleaning Services which is very much essential to keep the business premises safe and clean and hence the denial is clearly uncalled for - Reliance can be placed in the case of M/S HCL TECHNOLOGIES LTD. VERSUS COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE AND SERVICE TAX NOIDA 2015 (9) TMI 1037 - CESTAT NEW DELHI - Credit is allowed. Car parking charges - terrace charges - terrace and car-bike charges - HELD THAT - The parking charges is an essential service provided to all the employees and used by them during the course of their employment and hence this forms an essential service - denial of CENVAT Credit on the above service is therefore held to be bad. Auditorium Charges - HELD THAT - The service is an essential service since the trainings are provided for the employees of the appellant or business meetings are held there and hence the denial of CENVAT Credit is not justified. Event Management Charges - input service or not - it is the case of the appellant that the above services were used for promoting the brand name of the company and the expenses relating to advertisements or sales promotions are specifically covered within the scope of the definition of input service - HELD THAT - Issue decided in the case of M/S. BNP PARIBAS GLOBAL SECURITIES OPERATIONS P. LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE CHENNAI SOUTH 2019 (4) TMI 125 - CESTAT CHENNAI where it was held that event management service has been held to be eligible for credit - credit allowed. Purchase of air conditioning - it is the case of the assessee that the service were not used for the construction of a building or civil structure but they were in the nature of annual maintenance charges - HELD THAT - Reliance placed in the case of M/S. VIRTUSA INDIA PVT. LTD. VERSUS CCE HYDERABAD 2016 (6) TMI 681 - CESTAT HYDERABAD where it was held that credit is to be allowed - credit allowed. Membership Subscription - HELD THAT - The business promotion is very much essential for the survival of every company the membership only expands the reach thereof and hence it is a way of marketing the brand which is an essential service - credit allowed. Appeal allowed in part and part matter remanded.

Summary

Issues:
Denial of refund claim under Rule 5 of the CENVAT Credit Rules, 2004 for unutilized credit on inputs and input services used for providing output services.

Analysis:

1. Background:
The appellant challenged Orders-in-Appeal denying refund under Rule 5 of CENVAT Credit Rules, 2004. The primary issue was the rejection of part of the refund claimed by the assessee.

2. Appellant's Argument:
The appellant contended that the rejection of refund was erroneous and cited precedents to support their claim.

3. Revenue's Argument:
The Revenue argued that the appellant failed to provide details regarding specific services, leading to the denial of refund.

4. Cleaning Service:
Refund denial on cleaning services was overturned based on precedents establishing the essential nature of such services for providing output services.

5. Plant Rental Charges:
While the denial was initially considered invalid, lack of details led to a remand for further verification following precedents.

6. Freight Charges:
Refund denial on freight charges was set aside as these charges fell under the definition of "input service" in CENVAT Credit Rules.

7. Installation Charges:
Refund denial on installation charges was remanded for lack of details, with references to precedents supporting the appellant's claim.

8. Pest Control Charges:
Refund denial on pest control charges was overturned, aligning with precedents highlighting the essential nature of such services.

9. Car Parking Charges, Auditorium Charges, Event Management Charges:
Refund denials on these services were overturned based on precedents emphasizing their essential role in business operations.

10. Purchase of Air Conditioning:
Refund denial on air conditioning charges was deemed invalid as they were akin to annual maintenance charges, supported by relevant precedents.

11. Membership Subscription:
Refund denial on membership subscription charges was overturned, recognizing the essential role of business promotion and brand marketing.

12. Conclusion:
The appeals were partly allowed and partly remanded based on the detailed analysis of each service and the application of relevant legal precedents.

In conclusion, the judgment addressed the denial of refund claims under the CENVAT Credit Rules, 2004, analyzing each service category and overturning denials based on the essential nature of the services and relevant legal precedents.