2016 (2) TMI 256 - AT - Service Tax

Refund claim for the unutilized CENVAT Credit - Export of Information Technology Software Services - Held that - It is noted that after 1.4.2011, the words in relation to business have been removed. From the facts on record and the definition of input service given above it is clear that the input services in question have got nexus with the output service viz., IT Software Services which are being exported by the appellant. Matter remanded back with the direction that original adjudicating authority will examine the documents produced with reference to the quantum claimed as refund in case of works contract service by the appellant.

Summary

Issues:
Refund claim rejection of CENVAT Credit for various input services.

Analysis:
The appeals revolve around the rejection of refund claims for CENVAT Credit related to input services such as Business Support Services, Foreign Exchange Broking Services, General Insurance Services, Outdoor Caterer Services, and Works Contract Service. The appellant, represented by a Chartered Accountant, argued that these services were utilized for Information Technology Software Services exported as a 100% Export Oriented Unit (EOU), emphasizing the necessary nexus with the output services. Specific mention was made regarding the Works Contract Service, stating its importance for minor repairs essential for premises and equipment used in exporting output services.

The appellant's representative cited various decisions in support of their arguments, including cases like HCL Technologies Ltd. vs. CCE, Noida and CCE vs. HCL Technologies, among others. On the other hand, the Revenue's representative contended that the appellant needed to substantiate the relationship of the input services through proper documentation for their claim to be accepted.

Upon careful consideration of the case facts and arguments from both sides, it was determined that the input services in question fell within the definition of "input services" as per Rule 2(l) of the CENVAT Credit Rules, 2004. The definition encompassed services used by a provider of taxable service for offering an output service, establishing a clear link between the input services and the exported IT Software Services. Consequently, both appeals were allowed, with the condition that the original adjudicating authority would review the documents presented by the appellant concerning the refund claimed for Works Contract Service. For other input services, the refund quantum was undisputed, and the original authority was directed to process the refund within three months of receiving the Order, providing ample opportunity for the appellant to furnish any necessary evidence or documents.

In conclusion, the judgment resolved the issues surrounding the rejection of refund claims for CENVAT Credit related to various input services, emphasizing the necessity of establishing a nexus between the input services and the exported output services. The decision provided clarity on the eligibility for refund and outlined the process for further review and refund disbursement, ensuring a fair and thorough examination of the appellant's claims.