2011 (10) TMI 142 - AT - Central Excise

Manufacturer of goods falling under Chapter 84 and 85 of the Central Excise Tariff Act and is a 100% ELU - accumulated CENVAT credit in their CENVAT account and the appellants filed refund claims in respect of such accumulated CENVAT credit - The lower adjudicating authority rejected their refund claim against which they preferred an appeal - should have nexus or integral connection with the manufacture of final products As regards maintenance and repair service, it is seen that the maintenance and repair has been undertaken in respect of the office equipment installed in the factory of the appellant and such services are definitely input service clearing and forwarding agency service have been provided in connection with the export of goods and such services are in fact exempt from payment of service tax. In case service tax has been paid on such service, the assessee would be rightly entitled for refund Technical testing and analysis service availed in respect of the goods exported is an eligible input service without which the export of goods cannot take place, as the export of goods are subject to quality parameters. Hence it is an eligible input service As regards management consultancy service, the appellant submits that such services had been availed in respect of foreign exchange risk management and amalgamation and merger of the units of the assessee. These are all services relating to business activity and as per the definition of input service, services in relation to business activity are eligible input service. As regards GTA service in respect of which CENVAT credit has been availed, it is seen that in the instant case, the said service pertain to import of inputs and capital goods. There cannot be any doubt regarding such services being input service as defined in Rule 2(l) of the CENVAT Credit Rule

Summary

Issues:
Refund claims disallowed on service tax paid for various services - Catering, telephone, maintenance, clearing and forwarding, technical testing, management consultancy, and GTA services.

Analysis:
The appellant, a manufacturer under Chapter 84 and 85 of the Central Excise Tariff Act, filed refund claims for accumulated CENVAT credit on service tax paid for different services. The lower adjudicating authority and the Commissioner of Central Excise (Appeals) rejected the refund claims. The appellant appealed, citing previous Tribunal orders allowing similar refunds. The appellant argued for the refund of service tax paid on catering services, relying on the High Court's decision in Ultratech Cement's case, which permitted such refunds except for the portion borne by workers. The Tribunal agreed, allowing the refund for catering services.

Regarding telephone services, the Tribunal referenced the Ultratech Cement case, allowing service tax credit on mobile phones for employees. The Tribunal held that refunds for service tax paid on mobile phones installed at employees' residences were eligible if borne by the appellant. For maintenance and repair services on office equipment in the factory, the Tribunal deemed them as 'input services' related to manufacturing and allowed the credit under CENVAT Credit Rules, 2004.

The Tribunal also recognized clearing and forwarding agency services for exports as exempt from service tax, entitling the appellant to refunds if paid. Technical testing and analysis services for exported goods were considered essential input services for meeting quality parameters, making them eligible for refunds. Management consultancy services related to business activities, like foreign exchange risk management and unit mergers, were deemed eligible input services, warranting refunds.

Regarding GTA services for importing inputs and capital goods, the Tribunal affirmed their status as 'input services' integral to manufacturing activities. Citing previous Tribunal orders, the Tribunal allowed the appeals, granting the appellant refunds on service tax paid for services utilized in manufacturing and exporting goods. Consequently, all three appeals were allowed with consequential reliefs, if any, in favor of the appellant.