2015 (12) TMI 340 - AT - Service Tax

Rectification of mistake - no finding was given on the ground dealing with nexus of Certain services such as General Insurance of Group, Medical policies and Outdoor Catering of export of services, therefore there is apparent mistake on record of the impugned order. - Held that - General Insurance for group and Medical policies are in respect of employees of the Respondent as per the statutory provisions under Factory Act, and Industrial law. As regard outdoor catering, in various judgments, allowed Cenvat on outdoor catering services considering it as input services. As regard the issue that certain policies are in personal name and not of the assessee, I am of the view that though the certain bills were issued in the name of individual but the same was accounted for in the books of accounts of the appellant, merely because bills in personal name, it cannot be said that services not used by the respondent. Expenditure towards that bill was booked in the respondent s account, therefore in my considered view, the Cenvat credit is rightly admissible in respect of aforesaid services and therefore it has nexus with export services. In view of my above observations the Cenvat credit is admissible on the services and refund on the export services is adversely affected - Decided against Revenue.

Summary

Issues involved:
Rectification of mistake in Tribunal Order regarding admissibility of Cenvat credit on certain services used for export services.

Analysis:
The judgment concerns an application for rectification of mistake in Tribunal Order No. A/738-742/15/SMB dated 18/3/2015. The issue raised in the appeal by the Revenue was regarding the admissibility of Cenvat credit on certain services used for export services. The Revenue contended that the Commissioner's findings appeared to be conjecture without establishing the nexus of input services with the exported output services. The Revenue argued that some input services, such as General Insurance for Group, mediclaim policies, and Outdoor catering, did not have a clear nexus with the output services provided, making them inadmissible for Cenvat credit. Additionally, the Revenue highlighted discrepancies in the documents used to avail Cenvat credit, which were not in conformity with the relevant provisions. The Commissioner (Appeals) was criticized for not providing reasons to support the benefit granted, rendering the order non-speaking.

The Ld. Superintendent (A.R.) representing the Revenue pointed out that the specific ground raised in the appeal was not addressed in the Tribunal's order, indicating a mistake on record. Upon careful consideration, the Tribunal acknowledged the oversight and noted that certain services, such as General Insurance for group and Medical policies, were essential for employees as per statutory provisions. Furthermore, the Tribunal cited precedents where Cenvat credit was allowed on outdoor catering services, considering them as input services. Regarding bills issued in personal names, the Tribunal opined that as long as the expenditure was accounted for in the appellant's books, the services could be considered as used by the respondent, making the Cenvat credit admissible. Consequently, the Tribunal concluded that the Cenvat credit on the services in question was rightly admissible, impacting the refund on export services. As a result, the Tribunal upheld its previous decision from 18/3/2015, maintaining the appeal in favor of the appellant. The application for rectification of mistake was disposed of accordingly.