2013 (12) TMI 212 - AT - Service Tax

Disallowance of irregular cenvat credit availed - Nexus with software exports - Rejection of a refund claim - Held that - since the several services in respect of which cenvatable tax was remitted by the appellant and these are input services having a proximate nexus with the software exports service provided by the appellant, the appellant is legitimately entitled to avail cenvat credit and is also entitled to refund of cenvat credit - The matter in any way stands remitted to the adjudicating authority for verification of the bills/invoices for correlation and establishment of the appellant s claim to the extent allowed by the Commissioner (Appeals) - Decided in favour of assessee.

Issues:
1. Refund claim for cenvat credit rejection.
2. Denial of cenvat credit on certain input services.
3. Rejection of refund claim for specific services.
4. Disallowance of input service credit on various grounds.

Analysis:
1. The appellant filed a refund claim seeking cenvat credit for service tax remitted on input services used for providing output service. The claim was partially rejected by the adjudicating authority, leading to an appeal. The appellate authority partially allowed the appeal, granting refund for certain input services but rejecting it for others. The appellant contested the rejection of refund for services like tour operator and rent-a-cab, asserting that these were essential input services. The Commissioner (Appeals) rejected the claim for services like civil construction works, painting, landscaping, and others, stating they were not directly related to the output service of software exports. However, the judge held that denial of refund for integral business services could not be sustained, allowing the refund for these components.

2. The appellant also claimed refund for taxes paid on services like event management, public relations, and personnel training, among others. The appellate Commissioner rejected some claims, stating they were not directly related to the output service of software exports. The judge disagreed, stating that taxes paid on services related to business management, consultancy, and training should be eligible for refund if taxes were remitted for these services. The appellant's denial of cenvat credit on certain input services was contested, with discrepancies in invoices cited as the reason for denial. The appellate authority granted relief for invoices with minor discrepancies but upheld inadmissibility for invoices lacking necessary details.

3. The appellant's claim for refund on services like event management, public relations, and consultancy was rejected by the Commissioner (Appeals). However, the judge found that these services were not unrelated to the output services provided by the appellant, thus allowing the refund for these services. The matter was remitted to the adjudicating authority for verification of invoices to establish the appellant's claim for refund. The judge reiterated the appellant's entitlement to cenvat credit for a wide range of input services, subject to verification and establishment of tax remittances.

4. The denial of cenvat credit on certain input services was based on discrepancies in invoices and failure to submit copies of invoices. The appellate authority granted relief for invoices with minor discrepancies but upheld inadmissibility for invoices lacking necessary details. The judge allowed cenvat credit and consequent refund for specific services subject to verification of documents, emphasizing the need for compliance with all conditions and procedures. The matter was remitted to the adjudicating authority for verification of invoices and ascertainment of the quantum of credit, ensuring the appellant's entitlement to refund for the appropriately ascertained cenvat credit.

In conclusion, the judgment addressed various issues related to refund claims, denial of cenvat credit on input services, rejection of refund claims for specific services, and disallowance of input service credit on various grounds. The judge upheld the appellant's entitlement to cenvat credit and refund for a range of input services, subject to verification and compliance with necessary procedures. The matter was remitted to the adjudicating authority for further verification and ascertainment of the refund amount.

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