2016 (10) TMI 485 - AT - Service Tax

Refund claim u/r 5 of CCR, 2004 - Notification No. 5/2006-CE (NT) dated 14/3/2006 - input service - Mandap Keeper - Outdoor catering - event management - interior decorator - storage and warehousing - technical testing and analysis - erection commissioning and installation - Pandal and Shamiana - photography - cable services - renting of immovable property - Held that - The dispute is eligibility of such credit for the purpose of refund under Rule 5. First of all, the eligibility of certain input services for credit purposes is being disputed and denied by the Original Authority during the course of processing the refund claim under Rule 5. The correct course of action would be to decide the eligibility of various input services for credit and thereafter in the refund proceeding decide the correctness of the claim in terms of the provisions of Rule 5 readwith the relevant notification. Such process has not been followed in the present cases. Board vide its circular dated 19/1/10 clarified that there cannot be two yard sticks, one for availing credit and another for granting refunds. One way to interpret the eligibility of credit is to check whether the absence of such input services would adversely impact the quality and efficiency of the exported service. If the answer is in affirmative the input service should be held as eligible for credit. The decision in the respondent s own case 2010 (8) TMI 47 - PUNJAB AND HARYANA HIGH COURT relied upon where it was held that Any service cannot be disqualified on the basis that the same has only peripheral connection with the output service as long as it is proven the same has been used in providing export services. Once it is established that the said services have been used for providing the output service, rebate claim becomes admissible subject to verification of the payment of service tax on the said services. If the documents contained basic details of service availed, tax paid, the details of service provider and service recipient, the credit cannot be denied on certain procedural grounds. The fact that the service have been utilized and tax on such services have been paid is the basic issue to be satisfied. If there is no dispute on these requirements, denial of credit on certain technicalities cannot be sustained - refunds allowed - appeal rejected - decided against Revenue.

Summary

Issues Involved:
11 appeals filed by Revenue against various impugned orders regarding refund claims under Cenvat Credit Rules, 2004 read with Notification No. 5/2006-CE (NT) dated 14/3/2006.

Detailed Analysis:

1. Eligibility of Input Services for Credit Purposes:
The dispute in the case revolved around the eligibility of certain input services for credit purposes under Rule 5 of Cenvat Credit Rules, 2004. The Original Authority partially allowed the refund claims disallowing credit for certain input services and documents. The Commissioner (Appeals) later sanctioned the remaining amount of the claims. The Revenue appealed against these orders. The Tribunal noted that the eligibility of input services for credit should have been decided before processing the refund claims. Despite this, the Tribunal examined the eligibility upheld by the Appellate Authority.

2. Specific Input Services Disputed:
Various input services like Mandap Keeper, Outdoor catering, event management, interior decorator, storage and warehousing, technical testing, and analysis were under dispute. The Tribunal analyzed each service's nexus with the output service provided by the respondent to determine their eligibility for credit. The Tribunal also referred to a circular clarifying that the absence of such input services impacting service quality should make them eligible for credit.

3. Commissioner (Appeals) Findings:
The Commissioner (Appeals) examined each input service's eligibility and found them admissible for credit. The Revenue contended that certain services were not connected to the export of services, but failed to provide evidence supporting their claim. The Tribunal referred to a High Court decision upholding the admissibility of services used for providing output services.

4. Miscellaneous Matters:
The Commissioner (Appeals) held that interest is payable on delayed refund sanction. The Tribunal agreed with this finding. Regarding denial of credit based on incomplete documents, the Tribunal stated that as long as basic details of services availed and tax paid were present, credit cannot be denied on procedural grounds. The utilization of services and payment of tax were considered essential requirements.

5. Final Decision:
After considering the detailed findings of the Commissioner (Appeals) and the lack of contrary evidence from the Revenue, the Tribunal concluded that the impugned orders could not be interfered with. The appeals filed by the Revenue were dismissed, upholding the lower Authority's orders.

This comprehensive analysis covers the issues involved in the legal judgment, detailing the Tribunal's examination of the eligibility of input services for credit, specific disputed services, Commissioner (Appeals) findings, miscellaneous matters, and the final decision reached by the Tribunal.