2015 (8) TMI 30 - AT - Service Tax

Denial of refund on input service credit lying unutilized in their Cenvat credit account of export of service - Various services - Held that - For outdoor catering services, the contention of the learned AR has submitted that as there is statutory requirement for the canteen, therefore they are entitled to Cenvat credit in the light of decision of this Tribunal in the case of Semco Electricals (2009 (12) TMI 143 - CESTAT, MUMBAI) wherein this Tribunal has held that if the employees of an organization comes under the statutory requirement to maintain the canteen, then also Cenvat credit is available. Therefore I hold that appellant are entitled to claim Cenvat credit of ₹ 70,745/- on this count. Consequently entitled for refund claim under notification No. 5/2006. Both services, i.e. sewage treatment plant, garden, canteen assets, water purifier, repair of car used for business travel purpose, business premises and assets including workstations, office furniture, used for business purposes, are in the nature of services availed by the appellant in the course of their manufacture. Therefore, I hold that the appellant is entitled to avail input credit services as held by the Hon ble High Court in the case of Ultratech Cement. Therefore I allow the input credit services of ₹ 4,78,842/-. Consequently, the appellant are entitled for refund of the same. All the invoices produced were in the name of employees and number of working days. Therefore it works out that how much time they take and the service provider has paid service tax. Further I find that for the subsequent period lower authorities have already allowed these services as man power recruitment services and allowed the Cenvat credit. Therefore, appellant is entitled to take Cenvat credit of ₹ 9,36,669/- under the category of man power recruitment service and consequently, they are entitled for refund claim under notification No. 5/2006 For ambulance services and non-mentioning of service recipient on the invoices raised by Reliance Communication, as learned Counsel conceded, therefore, I disallow the input service credit on this service - Decided partly in favour of assessee.

Summary

Issues:
Refund claim denial based on input service credit eligibility under Cenvat Credit Rules, 2004 for services like outdoor catering, maintenance and repair, manpower recruitment, ambulance service, and non-mentioning of service recipient.

Analysis:
1. The appellant appealed against the denial of a refund claim amounting to Rs. 15,72,298 for the period April to June 2010 under Notification No. 5/2006 related to unutilized input service credit for export of service.
2. The Commissioner (Appeals) rejected the refund claim citing that certain services claimed by the appellant did not qualify as input services under Rule 2(1) of Cenvat Credit Rules, 2004, such as outdoor catering, maintenance and repair services, manpower recruitment services, and non-mentioning of service recipient details.
3. The appellant argued that for outdoor catering services, they had already reversed a portion of the amount recovered from employees and were entitled to the remaining credit as per precedent rulings. Similarly, for maintenance and repair services, they justified their claim based on services availed for maintaining their office to provide output services. They also provided evidence supporting manpower recruitment services eligibility for credit.
4. The appellant conceded the ineligibility for input service credit on ambulance services and non-mentioning of service recipient by Reliance Communications Ltd.
5. The opposing argument highlighted the lack of proper service recipient description on invoices for manpower recruitment services, making Cenvat credit inadmissible as per Service Tax rules.
6. The Agreement produced was for consulting engineering services, not manpower recruitment, challenging the appellant's claim for Cenvat credit on such services.
7. The opposing party contended that the services claimed lacked a nexus with those provided by the appellant, emphasizing the requirement of a connection for Cenvat credit eligibility.
8. After hearing both sides, the Tribunal ruled in favor of the appellant for outdoor catering services, maintenance and repair services, and manpower recruitment services, allowing input credit and subsequent refund claim under Notification No. 5/2006.
9. However, input service credit was disallowed for ambulance services and non-mentioning of service recipient on invoices raised by Reliance Communication, as acknowledged by the appellant.
10. The appeal was disposed of with the above decisions pronounced in open court.