2020 (4) TMI 102 - AT - Service Tax

Rejection of rebate claim - Refund or rebate claim - non-compliance with conditions of N/N. 11/2005 dated April 19, 2005 - failure to produce details of Cenvat credit availed/utilized, maintenance of proper records showing the receipt and consumption of the input services etc. - relation of input service with output service - HELD THAT - The Appellant have produced the decision of Supreme Court in SHARE MEDICAL CARE VERSUS UNION OF INDIA 2007 (2) TMI 2 - SUPREME COURT , to hold that the Appellant is allowed to choose the rebate option, when more than one options are available. Therefore, the denial of rebate on the ground of not opting for refund under Rule 5 of CCR, is not sustainable in law and therefore, appellants are entitled to the rebate under the provisions of Notification 11/2005 - The appellant is also entitled to rebate under Notification 11/2005 since all conditions are fulfilled by the Appellant. Rebate also rejected on the ground that there is no direct nexus between the input service and the output services - HELD THAT - This ground is also not sustainable - The appellant produced various decisions wherein these services have been held to be input services and has nexus with the output service - Further, in case of a rebate, the question of which input was used in terms of availment of cenvat credit does not arise as settled by Tribunal judgments quoted by the Appellant - Therefore, the denial of rebate on lack of nexus is not sustainable in law - the appellants are entitled to the rebate on these input services. Non-production of details of Cenvat credit availed/utilized, maintenance of proper records showing the receipt and consumption of the input services etc. - HELD THAT - Despite Appellant s claim that all the documents were submitted even at the time of rebate claim, the case remanded to the original authority who will examine the documents. The matter is remanded to the original authority for verification of the documents required as per the conditions prescribed in the Notification 11/2005 and grant rebate as per the same Notifications - Appeal allowed by way of remand.

Summary

Issues:
1. Rebate claims rejected under Notification 11/2005.
2. Compliance with conditions of Notification 11/2005.
3. Lack of nexus between input services and output services.
4. Failure to produce details of Cenvat credit availed/utilized.

Analysis:
1. The appellants filed appeals against orders rejecting rebate claims under Notification 11/2005. The Commissioner (A) upheld the rejections citing non-compliance with conditions. The Tribunal noted that denial based on not opting for refund under Rule 5 of CCR was unsustainable as per Share Medical Care judgment. Appellants were deemed entitled to rebate under Notification 11/2005.

2. The Tribunal found that conditions for rebate were satisfied, including exporting taxable services, receiving consideration in foreign exchange, and payment of service tax. The AR argued against the impugned order, but the Tribunal held in favor of the appellants, setting aside the rejection and remanding the case for document verification.

3. The impugned order raised concerns about the nexus between input and output services, which the Tribunal deemed legally unsustainable. Citing precedents, the Tribunal ruled in favor of the appellants, stating that the denial of rebate on the grounds of lack of nexus was not justified.

4. Regarding the failure to produce details of Cenvat credit, the Tribunal remanded the case to the original authority for examination of the documents. Despite the appellant's claims of submitting all necessary documents, further verification was deemed necessary as per the conditions of Notification 11/2005.

In conclusion, the Tribunal set aside the impugned orders, remanding the matter for verification of documents and granting rebate in accordance with Notification 11/2005. The appeals were disposed of accordingly on 04/03/2020.