2014 (1) TMI 41 - AT - Service Tax

Refund of CENVAT Credit - Information Technology Service - Assistant Commissioner allowed partial refund - Nexus with output service - Held that - consultants provided the services in order to file return in foreign countries for the income earned and this service has no nexus with the output service - Commissioner (Appeals) is not consistent in deciding the issue of eligibility of credit/refund in respect of Professional Charges and matter needs to be remanded back to Commissioner (Appeals) - Decided in favour of assessee.

Summary

Issues:
Refund claim of service tax paid on input services including Gardening Services, Pest Management Services, Professional Charges, Video Tape Production, and Logistic Services denied by the Commissioner (Appeals).

Analysis:
The appeal was filed by M/s HCL Comnet System and Services Ltd. against Order-in-Appeal No.237/Appl/Noida/12 dated 30.7.2012, regarding the rejection of their refund claim of Rs.3,48,47,415/- under Rule 5 of Cenvat Credit Rules for the period October 2010 to December 2010. The Assistant Commissioner allowed a part of the claim amounting to Rs.3,44,79,515/- but rejected the rest of the claim based on specific services. These services included Gardening within office premises, Pest Management Services, Professional Charges, Video Tape Production, and Logistic Service. The Commissioner (Appeals) upheld the rejection of the appeal.

In the judgment, it was noted that the major amount of Rs.3,78,525/- pertained to service tax paid on Professional Charges. The Commissioner (Appeals) held that these charges had no nexus with the output service, as consultants provided the services for filing returns in foreign countries for income earned. However, inconsistencies were pointed out in the Commissioner's decisions regarding the eligibility of credit/refund for Professional Charges. In a previous Order-in-Appeal dated 27.6.2012, the Commissioner had allowed Cenvat credit on Professional Charges. Due to this inconsistency, the matter was deemed to be remanded back to the Commissioner (Appeals) for further consideration.

Regarding the other services like Gardening Services, Pest Control, Video Tape, and Logistic services, the appellants had submitted various case laws to support their claim for a refund of service tax on these services. As the matter was being remanded to the Commissioner (Appeals), it was directed that the Commissioner should consider the case laws presented by the appellants and reevaluate the issue after providing an opportunity for the appellants to be heard.

Overall, the judgment focused on the inconsistencies in the Commissioner's decisions regarding the eligibility of credit/refund for specific services and the need for a reevaluation of the refund claim based on the presented case laws.