2017 (7) TMI 647 - AT - Service Tax

Refund claim - denial on account of nexus of the services received and consumed for providing the output services - Held that - the impugned order is correct and following the various case laws which have been cited in respect of the similar services and that also which are used for export of services. In the case in hand, there is no dispute that the respondent is an exporter of ITSS and BAS - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues involved:
Appeal against rejection of refund claims, eligibility of services for CENVAT credit, nexus between input and output services, interpretation of Cenvat Credit Rules.

Analysis:
1. Appeal against rejection of refund claims:
The Revenue filed an appeal challenging the Order-in-Appeal that rejected the refund claims of the respondent. The learned AR argued that the respondent failed to demonstrate the nexus between the services received and consumed for providing output services. The adjudicating authority rejected the refund claims, which the first appellate authority set aside. Despite the absence of the respondent, the appeal was considered for disposal.

2. Eligibility of services for CENVAT credit:
The issue revolved around the eligibility to avail CENVAT credit for service tax paid on various services like Business Auxiliary Service, Business Support Services, and Management or Business Consultancy Services. The first appellate authority emphasized studying the actual use of individual services as input services within the provisions of the Cenvat Credit Rules. The Tribunal held that the impugned services were eligible input services for refund under Rule 5 of CCR, 2004, based on previous judgments and relevant case laws.

3. Nexus between input and output services:
The lower adjudicating authority failed to establish a clear nexus between the input services and output services, leading to the rejection of refund claims. However, the Tribunal, following established case laws, set aside the findings of the impugned order and deemed the services as eligible. The appellant's contention that the service tax paid on the impugned services for subsequent quarters was refunded further supported the eligibility of the services for CENVAT credit.

4. Interpretation of Cenvat Credit Rules:
The Tribunal upheld the impugned order, emphasizing the settled law and precedents regarding the eligibility of similar services used for exporting services. The Tribunal noted that the respondent was an exporter of ITSS and BAS, confirming the eligibility of the services for CENVAT credit. Ultimately, the appeal was rejected, and the impugned order was upheld based on the established legal principles and case laws cited in the judgment.