2017 (11) TMI 406 - AT - Central Excise

Refund of unutilized CENVAT credit - various input services - denial on account of nexus - Held that - all the impugned services fall in the definition of input services as the same have been availed in relation to the manufacture of the product or the business of the appellant - Therefore appeal allowed by setting aside the impugned order but remand the case back to the original authority for computation after examining various documents - appeal allowed by way of remand.

Summary

Issues:
Refund of unutilized service tax credit for various input services. Eligibility criteria for refund. Rejection of refund due to insufficient documents. Appeal against the impugned order.

Analysis:
The judgment revolves around an appeal concerning the refund of unutilized service tax credit for specific input services availed by a 100% Export Oriented Unit (EOU) engaged in manufacturing and exporting organic compounds. The appellant filed a refund claim for a certain period, which was partially allowed by the original authority but rejected a portion due to lack of evidence showing direct use of the services in manufacturing or providing output services. The rejected services included Business Support Services, Commercial Training or Coaching Service, Courier Agency, Erection, Commissioning and Installation Services, Internet Telecommunication, Management Consultancy Service, Management, Maintenance and Repair Service, Manpower Recruitment or Supply Agency Service, Practicing Chartered Accountant Service, Rent-a-cab service, and Technical Testing and Analysis Services. The rejection was primarily based on the absence of an integral nexus between the input services and the final product.

Upon appeal, the Commissioner further modified the original order, denying the refund for specific services and citing reasons such as services received in another unit of the same appellant and exceeding the one-year limitation period prescribed under Section 11AB. The appellant contended that the impugned order ignored binding judicial precedents and argued that the denied services fell within the definition of input services, citing previous Tribunal orders in their favor. The appellant also highlighted the entitlement to claim a refund for services received in both premises under centralized registration.

After hearing both parties and examining the records, the Judicial Member allowed the appeal, setting aside the impugned order but remanding the case back to the original authority for computation after reviewing additional documents to be provided by the appellant. The decision emphasized that the impugned services were integral to the manufacturing process or the appellant's business, falling within the definition of input services. The judgment referenced previous Tribunal orders and a High Court decision to support the appellant's claim for refund eligibility in relation to services received across multiple premises under centralized registration.

In conclusion, the judgment grants relief to the appellant by recognizing the eligibility of the disputed input services for refund, subject to the submission of necessary documents for computation. The decision underscores the importance of establishing a direct connection between input services and the manufacturing process to qualify for service tax credit refunds.