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2013 (3) TMI 133 - AT - Service TaxRefund of Cenvat Credit - Rule 5 of CCR - Export of services - rejection on the ground of nexus between input and output services - rejection on the ground that services are not directly exported from the premises of the appellant but were routed through telecom service provider - rejection on the ground that IT services were not taxable prior to 16.03.2008 and therefore CENVAT credit could not be taken. held that - Allowing the cenvat credit matter remanded back in to verify the facts in view of decisions WNS GLOBAL SERVICES (P) LTD Versus COMMISSIONER OF CENTRAL EXCIE, MUMBAI 2008 (1) TMI 64 - CESTAT, MUMBAI and Repro India Ltd. v. Union of India 2007 (12) TMI 209 - BOMBAY HIGH COURT and CCE v. Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT .
Issues involved:
Refund of input service tax credit for export services; Rejection of refund claims by Mumbai, Pune, and Nasik Commissionerates; Eligibility of input services for refund; Nexus between input services and output services; Exemption of output services prior to specific dates; Export of services through a third party; Registration as an input service distributor. Analysis: 1. Mumbai Commissionerate Refund Claims: The appellant, a service provider under "Business Auxiliary Services," sought refund of input service tax credit rejected by Mumbai Commissionerate for the period April 2006 to March 2008. The rejection was based on the premise that certain input services were not directly related to the output services and errors in refund computation. The Tribunal found that the input services like auditing, advertising, rent-a-cab, catering, security, etc., were essential for the output services. Citing precedents, the Tribunal held that these services qualified as eligible input services under Rule 2(1) of the CENVAT Credit Rules, 2004. The matter was remanded to the adjudicating authority for reconsideration. 2. Pune Commissionerate Refund Claims: Regarding the Pune Commissionerate refund claims for the period before 2006, rejected due to the exemption of output services (Call Centre Services) prior to 01.03.2006, the Tribunal referred to its earlier order stating that the rules in force at the time of filing the claim should apply. It also cited a Bombay High Court judgment allowing CENVAT credit for input services used in manufacturing final products for export, even if the final products were exempted. The rejection based on the exemption of output services was deemed unfounded, and the case was remanded for review. 3. Nasik Commissionerate Refund Claims: Concerning the Nasik Commissionerate refund claims rejected for various reasons, including the indirect export of services and the absence of registration as an input service distributor, the Tribunal found the grounds for rejection unsustainable. It clarified that export through a telecom provider does not negate the export, and the taxability of output services does not affect the eligibility of input services for credit in export transactions. The rejection based on lack of ISD registration was deemed premature, as the focus should be on verifying the use of services in output services. The case was remanded for further examination. In conclusion, the Tribunal allowed the appeals by remanding the cases to the respective adjudicating authorities for reconsideration in light of legal precedents and specific guidelines provided, emphasizing the need for evidence supporting the export nature of services and timely claim filings.
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