2017 (6) TMI 1094 - AT - Customs

Refund of unutilized CENVAT credit - bank charges - technical testing charges - freight inward charges - import freight charges - telephone and internet charges - service charges - denial on the ground that the inputs in respect of which credit of service tax is claimed as credit are not utilized in or in relation to the manufacture of goods exported - Rule 5 of CCR, 2004 - Held that - in the appellants own case Jeans Knit (P.) Ltd. Versus Commissioner of Customs, Bangalore 2010 (11) TMI 123 - CESTAT, BANGALORE , these services have been held to be input services and refund has been allowed - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeals filed by Revenue against Commissioner (A) order allowing refund of CENVAT credit on various services utilized for manufacture and export of goods.

Analysis:
The case involved eight appeals filed by the Revenue against the Commissioner (A) order dated 30.7.2010 disposing of seven appeals and another order dated 28.8.2010 disposing of two appeals. The respondent-assessee, a 100% EOU engaged in manufacturing and exporting readymade garments, filed applications for refund of CENVAT credit under Rule 5 of CENVAT Credit Rules, 2004 for services like bank charges, technical testing charges, freight charges, telephone and internet charges, etc. The Assistant Commissioner allowed the refund, leading to the Revenue filing appeals on the grounds that the services claimed as credit were not utilized in manufacturing goods for export. The Commissioner (A) upheld the original order, prompting the Revenue to file the present appeals.

Both parties presented their arguments, with the appellant's AR contending that the services do not qualify as input services under Rule 2(l) of CCR, 2004, and the Commissioner (A) failed to appreciate Rule 5 of CCR along with Notification No.5/2006. On the other hand, the respondent's counsel defended the order, asserting that the services in question fell within the definition of input services and were utilized in connection with the business. The counsel cited precedents supporting the classification of these services as input services.

After considering the submissions and cited judgments, the Judicial Member found no fault in the Commissioner (A) order allowing the refund of CENVAT credit for the disputed services. Citing the precedent where similar services were considered input services, the Judicial Member upheld the impugned orders and dismissed the Revenue's appeals. The decision was pronounced in Open Court on 23/06/2017.