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2021 (4) TMI 894 - AT - Service TaxRefund of unutilized cenvat credit - service tax paid on various input services said to have been used for providing output services exported outside India - rejection of refund only on the ground of lack of nexus between the input services and the output services which is exported - N/N. 27/2012-CE (NT) dated 18/06/2012 read with Rule 5 of Cenvat Credit Rules, 2004 - period October 2015 to December 2015 - HELD THAT - It has been consistently held by the Tribunal in various decisions cited supra wherein the Tribunal has taken a view that after the amendment of Rule 5 of Cenvat Credit Rules, 2004, there is no need for one to one correlation between the input services and the output services and moreover the Board Circular dated 16/03/2012 also clarified that no correlation is required because the intention of the Government is to allow refund to the exporters and the Circular/clarification issued on this subject have to be viewed with the objective of allowing the refund. Department has not questioned the service tax paid on input services at the time when the cenvat credit was taken and as per the decision of this Tribunal in the case of K LINE SHIP MANAGEMENT INDIA PVT. LTD. VERSUS C.C.G.S.T., MUMBAI WEST 2018 (12) TMI 1481 - CESTAT MUMBAI , it has been held that the Department is not permitted to question the same at the time of claiming refund. Further in view of the clarification given by the Tax Research Unit of CBEC vide their letter dated 16/03/2012, the amended Rule 5 of Cenvat Credit Rules does not require correlation between the output service exported and the input service used in such output services exported. Further, as far as Rent-a-Cab service is concerned which the Department has disputed on the ground of exclusion, it is found that in the present case the appellant has availed the services of Rent-a-cab for the purpose of bringing and dropping the employees and this service has been used for providing the output service and the invoices have been produced by the appellant. The appellant is entitled to refund of CENVAT credit - Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Rejection of refund claim for unutilized cenvat credit. 2. Lack of nexus between input services and output services. 3. Non-production of invoices for certain services. 4. Eligibility of specific input services for cenvat credit. Issue-wise Detailed Analysis: 1. Rejection of Refund Claim for Unutilized Cenvat Credit: The appellant filed a refund claim for ?4,26,79,323/- on 20/09/2016 for unutilized cenvat credit on input services used for providing output services exported outside India. The original adjudicating authority granted a refund of ?4,15,49,358/- and rejected ?11,29,965/- as ineligible cenvat credit. The Commissioner (Appeals) upheld the rejection except for allowing cenvat credit of ?34,250/- for Technical Consultancy Services. The Tribunal found the rejection of the refund claim unsustainable, as the amendment to Rule 5 of the Cenvat Credit Rules, 2004, and the Board Circular dated 16/03/2012 were not properly considered. 2. Lack of Nexus Between Input Services and Output Services: The learned Commissioner rejected the refund mainly on the ground of lack of nexus between input services and output services. The Tribunal held that after the amendment to Rule 5 of the Cenvat Credit Rules, 2004, no one-to-one correlation is required between input services and output services. The Board Circular dated 16/03/2012 clarified that the intention of the Government is to allow refunds to exporters without requiring correlation. 3. Non-production of Invoices for Certain Services: The Commissioner observed that the appellant did not file invoices for certain services, which was found incorrect by the Tribunal. The appellant had filed the invoices, and they were examined by the original authority and produced before the Tribunal. The Tribunal noted that the Department cannot dispute the eligibility of credit during refund proceedings and should initiate separate recovery proceedings under Rule 14 of the Cenvat Credit Rules, 2004, if needed. 4. Eligibility of Specific Input Services for Cenvat Credit: The Tribunal addressed the eligibility of various input services: - Maintenance and Repair Services: Held as 'input services' necessary for maintaining business premises and office equipment, vital for providing output engineering services. - Rent-a-Cab Services: Used for employee transportation, deemed necessary for providing output services. The Tribunal found that these services are covered under the main clause of 'input service' despite the Department's exclusion argument. - Commercial Coaching & Training Services: Essential for training employees in a knowledge-based industry to provide engineering consultancy services. - Security Agency Services: Invoices were produced, and these services were deemed necessary for business operations. - Business Auxiliary and Business Support Services: Related to disposal of e-waste and customs clearing, respectively, and were considered 'input services.' - Courier Services: Necessary for communication with clients and vendors, supported by relevant invoices. The Tribunal concluded that all these services qualify as 'input services' and allowed the refund of cenvat credit of ?10,95,715/-. The appeal was disposed of in favor of the appellant, emphasizing the consistent Tribunal view that no correlation is required between input and output services post-amendment to Rule 5 of the Cenvat Credit Rules, 2004.
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