2022 (2) TMI 201 - AT - Service Tax

Refund of unutilized CENVAT Credit - Car parking Service - Interior Decorator Service - water supply services - telecommunication services - update of current trends in IT industry, SAP, etc. - payment made for an IT conference to M/s. Entrine Business Services Pvt. Ltd - services availed for getting the foreign exchange for the employees when they travel abroad on assignments - services of EEFC fund conversion into INR - consultancy service - HELD THAT - It is seen that most of these services are very much essential in running the day-to-day business of the appellant and are necessary for the smooth functioning of its business. Surprisingly, the First Appellate Authority has denied the refund has been denied for want of nexus. However, the Central Board of Excise and Customs (C.B.E.C.) has itself done away with the requirement of nexus vide its letter D.O.F. No. 334/1/2012-TRU dated 16.03.2012, which is binding on the First Appellate Authority as well. Hence, demanding of nexus is clearly contrary to the guidelines of the C.B.E.C. letter dated 16.03.2012, for which reason the impugned order denying refund on the above services cannot be sustained. The same is therefore set aside and to this extent, the appeal stands allowed with consequential benefits, if any, as per law. Water supply services - HELD THAT - No explanation was offered for the service, for which reason perhaps the authority has denied the benefit of refund. Before me, it is pleaded as above and the Learned Advocate for the appellant requested for a remand, for enabling the appellant to furnish supporting documents before the lower authorities. Hence, this issue is remanded back to the file of Adjudicating Authority, who shall consider all such documents that may be furnished by the appellant in support of its claim. Telecommunication service - Services of M/s. Bharti Airtel Ltd. - HELD THAT - Since there is no finding with regard to the verification of documents, this issue is also remanded to the file of the Adjudicating Authority for re-verification of the appellant s claim in the light of the documents which are produced or which were produced, again, for convenience. The appeal stands partly allowed and partly remanded.

Summary

Issues:
- Denial of CENVAT Credit for certain input services
- Eligibility of CENVAT Credit on specific services
- Rejection of refund claims by the First Appellate Authority
- Nexus requirement for refund eligibility
- Remand for further verification of certain services

Analysis:

The appeal in this case challenges the denial of CENVAT Credit for certain input services by the First Appellate Authority. The appellant had made a refund claim under Rule 5 of the CENVAT Credit Rules, 2004, for unutilized CENVAT Credit of Service Tax paid on input services used in providing exported output services. The Adjudicating Authority partially sanctioned the refund but rejected the balance claim as ineligible CENVAT Credit for specific services. On appeal, the First Appellate Authority allowed the refund for some services but upheld the denial for others, leading to the current appeal.

The Tribunal considered the appellant's own cases where CENVAT Credit was allowed for various services, including cleaning service, air travel agent services, car parking service, banking services, interior decorator service, business support service, event management service, tour operator service, foreign exchange service, and renting of immovable property service. The Tribunal found that the rejection of refund for certain services could not be sustained based on its previous decisions.

Regarding the specific services in question, the Tribunal held that the denial of CENVAT Credit for car parking service and interior decorator service was incorrect and directed their allowance. The Tribunal also addressed various other services such as IT industry trend updates, IT conference services, foreign exchange services, consultancy services, and water supply services. It noted the essential nature of these services for the appellant's business operations and highlighted that demanding a nexus for refund eligibility was contrary to CBEC guidelines. As a result, the Tribunal set aside the denial of refund for these services and allowed the appeal with consequential benefits.

However, for services related to water supply and telecommunication, the Tribunal remanded the issues back to the Adjudicating Authority for further verification. The appellant was granted the opportunity to furnish supporting documents for these services to establish their eligibility for CENVAT Credit. The Tribunal partly allowed the appeal and partly remanded it for re-verification based on the specific circumstances of each service.

In conclusion, the Tribunal's decision addressed the denial of CENVAT Credit for various input services, clarified the eligibility of specific services based on previous rulings, and emphasized the importance of essential services for business operations. The judgment provided detailed reasoning for allowing certain services, remanding others for further verification, and ensuring compliance with CBEC guidelines regarding refund eligibility.