2015 (9) TMI 939 - AT - Service Tax

Denial of refund claim - accumulated CENVAT credit - Notification No.5/2006-CE dated 14.3.2006 - Various input services - Nexus with output service - Held that - in respect of services reliance of the appellants on the decisions of the Tribunal mentioned against each service is applicable and appropriate. Moreover, the submissions regarding the nature of service received and its use also shows that stand taken by the Revenue that there is no nexus between input service and output service is not correct. - appellant is eligible for the refund and there is nexus between input services and output service - Decided in favour of assessee.

Summary

Issues involved:
Whether the appellant is eligible for a refund of accumulated CENVAT credit under Notification No.5/2006-CE dated 14.3.2006 issued under Rule 5 of CENVAT Credit Rules, 2004 due to the nexus between input services and output services.

Analysis:
The primary issue in this judgment revolves around the eligibility of the appellant for a refund of accumulated CENVAT credit under Notification No.5/2006-CE. The central question is whether there exists a nexus between the input services utilized by the appellant and the output services provided. The Revenue contended that such a connection was lacking, thereby challenging the appellant's eligibility for the refund.

The learned counsel for the appellant presented a detailed table outlining the input services and their direct utilization in providing output services. It was argued that the services were indeed essential for delivering the output services, contrary to the Revenue's assertion that they were non-essential. The appellant relied on various tribunal decisions to support their claim regarding the necessity and relevance of the input services.

Upon careful examination of the table submitted by the appellant, the presiding Member found merit in the appellant's arguments. The nature of the input services and their utilization in providing output services demonstrated a clear nexus, contradicting the Revenue's stance. Specific examples were cited, such as transportation/travel services, air fare tickets, xerox charges, food coupons, professional fees, pest control, telecommunication services, fit out rent, insurance services, forex purchase, and courier services, each supported by relevant justifications and legal precedents.

The Member concurred with the appellant's position that a direct link existed between the input services availed and the output services rendered. Consequently, the appeals were allowed, granting the appellant the right to the refund. The case was remanded to the original authority for the quantification and subsequent payment of the refund claim. The judgment emphasized the importance of establishing a clear nexus between input and output services to determine eligibility for CENVAT credit refunds.

In conclusion, the judgment underscored the significance of demonstrating the essential nature of input services in relation to the provision of output services to support claims for CENVAT credit refunds. The detailed analysis of each input service and its direct contribution to the output services highlighted the critical role of establishing a strong nexus to validate refund eligibility under the relevant notification and rules.