2017 (8) TMI 497 - AT - Service Tax

Refund claim - input services - denial on account of nexus - business support service - scientific and consulting service - maintenance or repair service - renting of immovable property - Held that - the Scientific and Technical Consultancy service is also an input service as the software of the company is required to be tested. Similarly, the service tax paid on the premises, which is hired for providing the output service also fall in the definition of input service - all the impugned services viz., BSS, Scientific and Technical Consultancy service and renting of immovable property are directly or indirectly concerned with the business of the appellant as a service provider - appeal allowed subject to verification of the invoices by the adjudicating authority.

Summary

Issues:
Appeal against rejection of refund under Section 84 of the Finance Act for unutilized CENVAT Credit of service tax paid on input services.

Analysis:
The appellant filed a refund claim for unutilized CENVAT Credit of service tax paid on input services used for providing output service. The original authority sanctioned a partial refund and rejected a portion of it. Subsequently, a show-cause notice was issued for demanding and recovering the rejected amount. The Commissioner of Service Tax found the refund erroneous due to a lack of nexus between the impugned services and the output service exported. The appellant appealed against this decision.

The appellant argued that services like Business Support Service (BSS), Scientific and Technical Testing Consultancy service, and renting of immovable property were directly or indirectly related to the business of the appellant as a service provider. The appellant provided explanations on how each service was essential for the business operations and supported their arguments with judicial precedents.

After hearing both parties and examining the records, the Tribunal found that all the impugned services were indeed related to the appellant's business activities. The definition of input service was interpreted broadly based on previous decisions. The Tribunal concluded that the impugned order was not legally sustainable and set it aside, allowing the appeal subject to verification of the invoices by the adjudicating authority.

In conclusion, the Tribunal allowed the appeal against the rejection of the refund under Section 84 of the Finance Act, emphasizing the essential nature of the impugned services for the appellant's business operations and highlighting the broad interpretation of input services based on judicial precedents.