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2021 (3) TMI 414 - AT - Service TaxRefund of CENVAT Credit - input services - input services in respect of STPI unit and used the same in the export of services - Circular No.120/01/2010-ST dated 19.1.2010 - Mandap Keeper and Restaurant Service - Public Management Relation Service - Video Production Agency services - Sponsorship Service - refund denied only on the ground of lack of nexus between the input services and the output services which is exported - Rule 5 of CENVAT credit Rules, 2004 - HELD THAT - All the services on which the refund has been rejected have been consistently held to be input services in various decisions relied upon by the appellant. Moreover, the Department has not questioned the service on input services at the time when the CENVAT credit was taken and a per the decision of this Tribunal in the case of K Line Ship Management 2018 (12) TMI 1481 - CESTAT MUMBAI , the Department is not permitted to question the same at the time of claiming refund. In view of the clarification given by the Tax Research Unit of CBEC vide their letter dated 16.3.2012, the amended Rule 5 of CENVAT Credit Rules does not require correlation between the output service exported and the input services used in such output services exported. The appellant is entitled to refund of CENVAT credit except in the case of Mandap Keeper and Restaurant Services - Appeal allowed in part.
Issues:
Refund claim rejection on input services for export services. Analysis: The appellant filed two appeals against the rejection of refund claims by the Commissioner. The appeals were related to input services used in exporting Call Centre Services and Renting of Immovable Property services. The CENVAT credit was availed and then claimed as a refund under Rule 5 of CENVAT Credit Rules. The disputed services in both appeals were similar, so they were discussed together. The refund details and services rejected were presented in a tabular format for clarity. The appellant argued that the impugned order lacked sustainability in law as it did not consider binding precedent decisions supporting the input services as essential for output services. The Commissioner rejected the refund based on the absence of nexus between input and output services, citing Circular No.120/01/2010-ST. The appellant referenced various tribunal and high court decisions where similar input services were considered valid. The appellant specifically defended the Business Auxiliary Services, emphasizing the importance of maintaining a clean environment for business operations. The appellant did not press for a refund on Mandap Keeper and Restaurant Services due to their exclusion from the definition of 'input service.' For Commercial Training or Coaching Services, the appellant argued that they were essential for leadership skill development, crucial for service exports. Similarly, for Public Management Relation Services, the appellant highlighted the importance of maintaining public relations for business promotion. Regarding Video Production Agency Services, the appellant explained their role in creating training videos for employees. Sponsorship Services were defended as a means to enhance company visibility for recruitment purposes. The appellant relied on legal precedents to support their arguments, emphasizing that the eligibility of credit cannot be questioned at the time of refund claim. The appellant also referenced a clarification by the Tax Research Unit of CBEC, stating that the correlation between exported output services and input services was not required under the amended Rule 5 of CENVAT Credit Rules. The Tribunal's decisions supported this clarification. After considering both parties' submissions, the Judicial Member allowed the appeals, stating that the appellant was entitled to the refund of CENVAT credit, except for Mandap Keeper and Restaurant Services in one of the appeals. In conclusion, the appeals were disposed of in favor of the appellant, emphasizing the importance of maintaining a nexus between input and output services, as well as highlighting the significance of legal precedents and clarifications provided by the Tax Research Unit of CBEC.
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