2021 (6) TMI 624 - AT - Service Tax

Refund of Service Tax paid - Hotel Accommodation Services - Out-of-Pocket Expenses - General Insurance Service - HELD THAT - The refund in respect of Hotel Accommodation Services is availed only for the benefit of the employees. The same issue has been allowed in favour of the appellants in their own case for the subsequent period - Refund allowed. Out-of-Pocket Expenses - HELD THAT - There are no sufficient documents showing the details of these expenses or the type of services that have been availed by the appellants - the appellant is not eligible for the refund of service tax paid on out-of-Pocket Expenses as they do not related to any particular service - refund not allowed. General Insurance Services - HELD THAT - This said issue is covered by decision in the case of M/S. ATC TYRES PVT. LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, TIRUNELVELI 2021 (3) TMI 681 - CESTAT CHENNAI where it was held that refund on such issue is allowed - refund allowed. Appeal allowed in part.

Summary

Issues:
1. Refund of service tax on Hotel Accommodation Services
2. Refund of service tax on Out-of-Pocket Expenses
3. Refund of service tax on General Insurance Services

Analysis:
1. Refund of service tax on Hotel Accommodation Services:
The appellant, an SEZ Unit, sought a refund of service tax under Notification No.12/2013 for Hotel Accommodation Services, Out-of-Pocket Expenses, and General Insurance Services. The Commissioner (Appeals) initially rejected the refund. However, the learned consultant argued that the Hotel Accommodation Services were provided for the benefit of employees until they secured permanent accommodation as per company perks. Notably, the department had previously allowed a refund for Hotel Accommodation Services in the appellant's subsequent period case. Upon review, it was found that the refund for Hotel Accommodation Services was justified as it solely benefited the employees, leading to the allowance of the refund in favor of the appellant.

2. Refund of service tax on Out-of-Pocket Expenses:
Concerning Out-of-Pocket Expenses, the lack of adequate documentation detailing these expenses or the specific services rendered to the appellants was highlighted. Consequently, it was determined that the appellant was ineligible for a refund of service tax on Out-of-Pocket Expenses, as these expenses were not directly linked to any particular service, thus upholding the rejection of the refund.

3. Refund of service tax on General Insurance Services:
The issue of service tax paid on General Insurance Services was also addressed. The appellant's consultant presented evidence indicating that the company bore the premiums for various insurance policies, such as Group Term Life Policy, Group Gratuity Policy, and Superannuation Policy, which aimed to cover risks and benefits for employees. Citing precedents from cases like M/s. ATC Tyres Vs. CGST & CE and M/s. GMR Engineering Ltd., it was concluded that refunds for General Insurance Services were permissible. Consequently, the appeal was partly allowed, setting aside the impugned order to allow refunds for Hotel Accommodation Services and General Insurance Services, while upholding the rejection of the refund for Out-of-Pocket Expenses. Any consequential reliefs were granted accordingly.