2016 (6) TMI 678 - AT - Service Tax

Refund - export of services - Rule 5 of CENVAT Credit Rules, 2004 read with Notification No.5/2006-CE(N.T.) dt. 14/03/2006 - Various input services - nexus with output services - Held that - At the outset, it has to be stated that the period involved is from January 2011 to March 2011 (prior to 01/04/2011) when the definition of input services had a wide ambit as it included the words activities relating to business. The services listed in the table have been held to be eligible for credit/refund during the relevant period - Refund allowed - Decided in favor of assessee.

Summary

Issues:
Appeal against rejection of refund claim for service tax paid on input services used for exported services.

Analysis:
The appellants, engaged in Information Technology Software Services and Manpower Recruitment Agency Services, filed a refund claim for service tax paid on input services used for exported services. The original authority partially sanctioned the claim, leading to an appeal. The Commissioner(Appeals) upheld the rejection for some services but directed a reevaluation for others. The appellants, dissatisfied with the decision, appealed further.

The appellant's counsel presented a detailed tabular breakdown of disputed services and amounts. The refund claim was rejected on the basis of a lack of nexus between input and output services. Notably, the period in question was prior to 01/04/2011, when the definition of input services was broader, encompassing activities related to business. Several judgments were cited to support the eligibility of the listed services for credit/refund during the relevant period.

Considering the legal precedents and the broad definition of input services during the period in question, the rejection of the refund claim was deemed unsustainable. The impugned order was set aside, and the appeal was allowed with any consequential reliefs. The operative part of the order was pronounced at the conclusion of the hearing.