2024 (7) TMI 1395 - AT - Central Excise

Refund of unutilized CENVAT credit lying in their books of accounts under Rule 5 of CENVAT Credit Rules, 2004 - rejection of refund on Erection , Telephone and outward transportation service - period October 2009 to June 2010 - HELD THAT - The impugned period i.e. October 2009 to June 2010 is prior to the changes brought in by Notification No. 3/2011 dated 1.3.2011, to the definition of Input service' under Rule 2 (l) of the Cenvat Credit Rules, 2004 with effect from 01/04/2011. Prior to the said date the definition of input services had a wide ambit as it included the phrase activities relating to business . Thus, almost all the services were covered within the definition of input services if used for providing the output services. There is nothing to show that the said services were not used for the provision of output service. Further considering the low tax amount involved in these appeals and the appellant being prima facie eligible for the refund it would be in order, to grant such benefits without straining the plain words of the section at this distant date. The impugned order is set aside and the appeals are allowed.

Summary

Issues:
Refund claims rejection, Service tax refund, Input service credit eligibility

Refund Claims Rejection:
The appeals were filed against the Order in Appeal rejecting refund claims for unutilized CENVAT credit. The appellant filed three refund claims which were rejected by the refund Sanctioning Authority. The Commissioner (Appeals) allowed refund of service tax related to security service and inward transportation but rejected refund for erection, telephone service, and outward transportation. The appellant challenged this decision by filing appeals.

Service Tax Refund:
The appellant's counsel argued that the refund claims for certain services were wrongly rejected. Specifically, for telephone service provided before the amendment of 01.04.2011, the counsel claimed it was eligible for refund. The counsel also cited legal precedents and circulars to support their argument. Regarding outward transportation, the counsel referenced a Supreme Court decision allowing input service credit up to the place of removal, which in the case of exports is the port. Additional judgments were cited to strengthen the argument.

Input Service Credit Eligibility:
The Tribunal noted that the disputed period was before the changes introduced by Notification No. 3/2011 dated 1.3.2011 to the definition of 'Input service.' Prior to this amendment, the definition had a broad scope, covering almost all services used for providing output services. Since there was no evidence to suggest that the services in question were not used for output services, and considering the minimal tax amount involved, the Tribunal decided to grant the refund benefits to the appellant without straining the statutory provisions. Consequently, the impugned order was set aside, and the appeals were allowed, with the appellant deemed eligible for any consequential relief as per the law.