2019 (12) TMI 1124 - AT - Service Tax

Refund of service tax - rejection on the ground that the appellants have not obtained registration - Rule 5 CENVAT Credit Rules 2004 read with N/N. 27/2002 - HELD THAT - The issue of eligibility of Cenvat refund has been decided in favour of the Appellant by this Tribunal this bench and other benches. Though the learned AR has cited a few cases decided by the co-ordinate bench at Delhi we find that Karnataka High Court in the case of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX 2011 (9) TMI 450 - KARNATAKA HIGH COURT has decided the issue in favour of the Appellant no contra judgement of any other high court has been placed before me. Therefore the issue is settled in favour of the appellants. Refund claim - input services - catering services - general insurance services - rent-a-cab services - HELD THAT - The services are very much required for continuation of the appellants as a BPO and nothing has been brought on record to say that this have been availed for any other purposes than their business activities - the said services are also eligible for Cenvat credit and consequently for the refund. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Refund claims rejection based on lack of registration, eligibility of various services for refund, rejection of refund claims for catering, general insurance, and rent-a-cab services.

Analysis:
The case involved the rejection of refund claims by the appellants for BPO services under Rule 5 CENVAT Credit Rules, 2004. The rejection was primarily due to the absence of registration. The appellant argued that registration is not a prerequisite for granting a refund, citing relevant cases to support their claim. Additionally, the appellant highlighted that a refund for a subsequent quarter was granted despite registration obtained after the service period, further strengthening their argument.

Regarding specific services like catering, general insurance, and rent-a-cab services, the appellant contended that these were essential for BPO operations. They argued that providing food and transportation to employees around the clock was crucial for efficiency and productivity, supported by a Board Circular. The appellant also justified the necessity of general insurance services for employees based on precedents from relevant cases.

On the other hand, the department's Authorized Representative (AR) supported the initial rejection of refund claims, referencing previous tribunal decisions that upheld similar rejections. However, the presiding member noted that the issue of eligibility for Cenvat refund had been consistently decided in favor of the appellant by various benches, including the Karnataka High Court. The member found no contradictory judgments presented by the AR, ultimately ruling in favor of the appellant.

In the final judgment, both appeals were allowed, overturning the earlier rejection of refund claims. The presiding member concluded that the services in question, including catering, general insurance, and rent-a-cab services, were essential for the appellants' BPO operations. Therefore, the services were deemed eligible for Cenvat credit and subsequent refunds, providing relief to the appellants.