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2017 (10) TMI 29 - AT - Service Tax100% EOU - Refund of an amount debited for the service tax liability on the goods exported - denial on the ground that appellant has not been able to show the nexus in respect of the following services on which credit was availed - Held that - It is undisputed that appellant is a 100% EOU exporting the services of information technology software services to their parent concern. When such a factual position is undisputed, the services rendered by the service provider in respect of all the services as hereinabove reproduced are in relation to the provisions of export of services. As regards the other services, the said services are in respect of the service tax paid on Audio System and also on Event Management service, which in my view are in respect of the business activity of the appellant. Appeal allowed - decided in favor of appellant.
Issues involved: Rejection of refund claims for service tax liability on exported goods due to lack of nexus between input services and output services.
Analysis: 1. Rejection of refund claims: The appellant filed refund claims for the service tax liability on goods exported, utilizing CENVAT credit for input services. The adjudicating authority rejected the claims citing a lack of nexus between the input services and the exported output services, including insurance, rent, manpower supply, and professional services. 2. First appellate authority's decision: The first appellate authority upheld the rejection, stating the appellant failed to provide proof of service tax payment and did not meet the conditions of Export of Services Notification No.12/2005. 3. Compliance with Notification No.12/2005: The appellant contended they complied with the conditions of the notification and produced a copy. The Tribunal found that the services availed by the appellant were related to the export of services, and the services like Audio System and Event Management were part of their business activities. 4. Conditions of Notification No.12/2005: The Tribunal noted that the first appellate authority did not specify any unfulfilled conditions from the notification, which include payment for exported taxable services in foreign exchange, payment of duty on inputs, payment of service tax on input services, and not availing CENVAT credit on claimed inputs. 5. Precedents: The Tribunal referred to various judgments supporting the appellant's position, emphasizing their status as an export-oriented unit and the discharge of service tax liability on exported services. The Tribunal found the impugned order unsustainable and allowed the appeal, setting aside the rejection of refund claims. This detailed analysis covers the issues involved in the legal judgment, highlighting the key arguments, decisions, and legal provisions considered by the Tribunal in reaching its decision to set aside the rejection of refund claims.
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