2018 (8) TMI 1452 - AT - Service Tax

Refund of CENVAT credit - export of services - Rule 5 of CCR - refund rejected on Accommodation service and other services on the ground that the same is used for personal consumption - Held that - As regards accomodation services, the said services are entitled for CENVAT credit as the invoices enclosed herein with the appeal memoranda indicate that these amounts are for the lease/rent of the premises which are in the name of the appellant herein - as regards other services, the said services are in respect of the output services and appellant is able to provide satisfactory explanation to the Tribunal - refund allowed. Refund claim - Registration Service - denial on the ground of nexus - Held that - This amount is in no way connected with the services rendered by the appellant, accordingly the same stands rejected - refund rejected. Refund claim - excess rejection on registration service of INR 2,26,791/- - Invoice not submitted in case of maintenance services - Invoice submitted only for part of the amount in case of services received from NSK shipping and logistics - Non-submission of the signed invoice in case of services received form Engineer s Syndicate International - Excess credit claimed in case of rent paid to Kundur Vikram Reddy - Held that - These claims of the appellant needs reconsideration by the adjudicating authority as it is rejected only on the ground that documents were not submitted and there is a calculation error on the amount claimed as refund - matters remanded back. Appeal disposed off.

Summary

Issues:
Refund of CENVAT credit on input services used for exported services.

Analysis:
The appeal was against the order-in-appeal dated 21/09/2017 regarding the refund of ?10,25,570 arising from CENVAT credit on input services used for exported services. The appellant, holding centralised service tax registration for information technology software services, filed a refund claim of ?3,19,93,218 under the CENVAT Credit rules. The adjudicating authority partially sanctioned the amount, leading to an appeal. The 1st Appellate Authority rejected a portion of the refund claim, specifically ?10,25,570, citing various grounds for ineligibility.

Upon review, the 1st Appellate Authority found certain services and amounts ineligible for refund. These included accommodation services, other taxable services, registration service, and other service invoices not submitted or partially submitted. The Appellate Tribunal, after hearing both sides, analyzed each ground of rejection in detail.

Regarding the rejected amounts, the Tribunal found that some services, like accommodation for employees working 24/7 and various taxable services related to employment examinations and works contracts, were eligible for CENVAT credit. The Tribunal concluded that the appellant provided satisfactory explanations for these services, and the refund for such services should be sanctioned.

However, the Tribunal found that the amount related to the registration service had no connection to the services rendered by the appellant and thus rejected it. For the remaining amounts rejected due to document submission issues and calculation errors, the Tribunal decided that these matters required reconsideration by the adjudicating authority. Therefore, the Tribunal remanded the issue back to the adjudicating authority for a fresh review, emphasizing the importance of following the principles of natural justice.

In conclusion, the appeal was disposed of with specific amounts being eligible for refund, some rejected amounts needing reconsideration, and the issue remanded to the adjudicating authority for further review based on the principles of natural justice.