2023 (8) TMI 1322 - AT - Service Tax

Refund of CENVAT Credit - input services - inclusive clause is independent of means clause or not - nexus established between services rendered and the business carried out by the Assessee or not - HELD THAT - The activities relating to business have been further amplified by describing each of these services such as accounting, auditing, financing, computer networking, credit rating, security, etc., used in relation to the business. Therefore, the definition of input service covers both services used by the provider of taxable service for providing output service as well as services used in relation to, inter alia, activities relating to business as long as it is not specifically excluded from the definition of input service. Admittedly, none of these services were specifically excluded. There is also force in the argument that the ratio of M/S. MARUTI SUZUKI LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-III 2009 (8) TMI 14 - SUPREME COURT in respect of input service is not appropriate in as much as it was primarily in the context of input(s) and not any input service - In the case of M/S ALLIANCE GLOBAL SERVICES IT INDIA PVT. LTD. VERSUS THE COMMISSIONER C.C.E ST, HYDERABAD 2016 (6) TMI 720 - CESTAT HYDERABAD , the Coordinate Bench of the Tribunal, in the case of service provider/exporter of ITSS, held various input services including Courier service, Management, Maintenance Repair service, Manpower Recruitment service, Renting of Immovable Property service, etc., as having nexus with the exported service. The service was in the nature of Business Auxiliary Service and the service has been held to be otherwise an eligible service in respect of their company - Therefore, on both counts, this is eligible service for the purpose of taking credit. In the light of the said clarification, the credit claimed in the subsequent quarter for refund, even if pertaining to earlier quarter, has to be considered, if the same has not been availed or claimed as refund subsequently in another refund matter(s). This needs to be ascertained by the Lower Authority. Appeal allowed by way of remand.

Summary

Issues Involved:

1. Eligibility of input services for Cenvat credit.
2. Validity of invoices for claiming refunds.
3. Application of case laws and definitions related to input services.

Summary:

1. Eligibility of Input Services for Cenvat Credit:
The Appellants, exporters of "Information Technology Software Services," filed a refund claim under Rule 5 of Cenvat Credit Rules (CCR), 2004, for Rs. 28,91,197/-. The Adjudicating Authority sanctioned Rs. 16,07,026/- but rejected Rs. 12,43,758/- on grounds including lack of nexus between input services and business activities, relying on the judgment of Maruti Suzuki Ltd vs Commissioner [2009 (240) ELT 641 (SC)]. The Commissioner (Appeals) allowed credit for Rent-a-Cab and Renting of Immovable Property services but denied it for Courier, Chartered Accountant, Outdoor Catering, General Insurance, Management or Business Consulting, and Manpower Supply services, upholding the lower authority's order.

2. Validity of Invoices for Claiming Refunds:
The refund claim was partly rejected because an invoice dated 18.07.2010 did not pertain to the period in dispute, and another invoice was not submitted. The Commissioner (Appeals) ruled that the relevant invoice for the quarter ending September 2010 could not be included in the subsequent period's refund claim. The Appellant argued that the inclusive clause of 'input service' under CCR should be considered harmoniously and that business activities cover all related activities.

3. Application of Case Laws and Definitions Related to Input Services:
The Tribunal found that the definition of 'input service' under CCR, 2004, as it existed prior to 01.04.2011, includes services used in relation to business activities. The Tribunal ruled that the ratio of Maruti Suzuki Ltd (supra) was not appropriate for input services. It cited various judgments supporting the eligibility of input services like Courier, Chartered Accountant, Outdoor Catering, etc., for Cenvat credit. The Tribunal also referenced a Board Circular dated 19.01.2010, clarifying that refund claims for past periods should be allowed in subsequent quarters if not previously claimed.

Conclusion:
The Tribunal allowed the appeal, modifying the order of the Commissioner (Appeals) with consequential relief. It remanded the part of the refund claim amounting to Rs. 5,77,851/- to the Original Authority for verification in light of the Board's clarification.