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2022 (8) TMI 1105 - AT - Service Tax100% EOU under the Software Technology Park (STP) Scheme - refund of unutilized CENVAT Credit - input services or not - rejection of credit on the ground that credit availed subsequent to the last date of export - rejection also on the ground that unbilled revenue was not taken into consideration for computing the total turnover of the appellant - export turnover has been restricted by the authorities below to the documents proving the realisation of export proceeds - Service Tax Registration has not been mentioned in the invoice and that the appellant has not produced any Chartered Accountant certificate to this effect. HELD THAT - Prior to 01.04.2011, the definition of input service had a wide ambit as it included the words activities relating to business . Almost all the services availed by the appellant under this category, were used by the appellant-company for its business activities. In the decisions of various fora, it has been held that almost all the said services would fall within the definition of input service when they are used for providing output service, for the period prior to 01.04.2011 - the rejection of refund claims for all the services availed by the appellant prior to 01.04.2011, on the allegation that they do not qualify as input service , cannot be justified. After 01.04.2011, a major amendment was brought forth in the definition of input service whereby certain services have been excluded. Services in the nature of Outdoor Catering Service, Rent-a-Cab Service, Health Insurance, Leave and Home Travel Concession, etc., which are availed primarily for the personal use of an employee, are excluded from the purview of input service - The appellant is required to furnish details in respect of the purpose and places of travel along with evidence regarding the order given by the appellant-company to undertake the travel, etc. As the appellant has failed to produce such evidence, we cannot conclude that the Travel Agent Services were availed for providing output services. The appellant has not furnished any break-up with regard to the various services that are bundled under the category of Business Support Services. The credit under this head, for the categories of service explained by the Learned Consultant for the appellant, are not eligible for credit after 01.04.2011. Rejection on the ground that the appellant has availed the credit subsequent to the last date of export - HELD THAT - There is no requirement under Rule 5 of the CENVAT Credit Rules, 2004 or under Notification No. 05/2006-C.E. (N.T.) dated 14.03.2006 that there has to be one-to-one correlation between input and output services for claiming refund - It is also submitted by the Learned Consultant for the appellant that the computation of eligible refund is not correct for the reason that the credit taken after the last date of export has not been considered for the subsequent period also. These facts are required to be verified once again - Matter allowed by way of remand. Refund has been rejected in the ground that unbilled revenue was not taken into consideration for computing the total turnover of the appellant - HELD THAT - It is the case of the appellant that the unbilled revenue as on 31.12.2010 ought to have been recognised as revenue for computing the eligible refund. The matter is required to be re-looked by the Adjudicating Authority. Computation of eligible refund - export turnover has been restricted by the authorities below to the documents proving the realisation of export proceeds - HELD THAT - The refund is eligible only in respect of the Foreign Inward Remittance Certificates (FIRCs) (realization of export proceeds) produced by the appellant. However, taking note of the argument put forward by the appellant with regard to wrong computation of eligible refund, the matter has to be once again verified and considered by the Adjudicating Authority. Refund has also been rejected on the ground that Service Tax Registration has not been mentioned in the invoice and that the appellant has not produced any Chartered Accountant certificate to this effect - HELD THAT - If the appellant is able to furnish sufficient evidence to prove the payment of Service Tax, the amount of Rs.9,280/- rejected on this ground, should be considered. Refund has been rejected to the tune of Rs.50,730/- on the ground that Service Tax was not charged by the service provider in the invoices. If the appellant has not paid Service Tax, there is no question of granting any refund. The rejection of refund on this ground, in our view, is required to be upheld - the periods of dispute for the various grounds for rejection of the refund claim overlap with the period for which the dispute is settled by the appellant under the Sabka Vishwas Scheme, 2019. The matter requires to be remanded to the Original Authority for re-considering/re-processing the refund claims. In such remand proceedings, the Original Authority shall look into the discussions made hereinabove in this order with regard to the various grounds of rejection - Appeal allowed by way of remand.
Issues Involved:
1. Eligibility of various services as "input services" under Rule 2(l) of the CENVAT Credit Rules, 2004. 2. Credit taken subsequent to the last date of export. 3. Inclusion of unbilled revenue in total turnover for computing eligible refund. 4. Application of the correct formula for computing eligible refund. 5. Export turnover restricted to realization of export proceeds. 6. Non-mentioning of Service Tax registration and Chartered Accountant certificate not produced. 7. Invoices not produced. 8. Incorrect excess credit taken. 9. Service Tax not charged by service provider. 10. Dispute settled under the Sabka Vishwas Scheme, 2019. Detailed Analysis: 1. Eligibility of Various Services as "Input Services": - Pre-01.04.2011 Period: The Tribunal held that the definition of "input service" had a broad scope, including services related to business activities. Services such as Outdoor Catering, Customs House Agent, Insurance, Rent-a-Cab, Maintenance of Building, Commercial Training, Health and Fitness, Sodexo Pass, Pre-employment Health Checkup, Event Management, Travel Agent, Supply of Tangible Goods, Real Estate Agent, Consulting Engineer, Manpower Recruitment, Technical Inspection, Management Consultant, Convention Centre, Business Auxiliary, Printing of Spot Awards, Annual Maintenance Contract, Business Support, Information Technology, and Management Maintenance or Repair services availed before 01.04.2011 qualify as "input services." - Post-01.04.2011 Period: The definition was amended to exclude services primarily for personal use of employees. Services like Outdoor Catering, Insurance, Rent-a-Cab, Health and Fitness, Sodexo Pass, and Printing of Spot Awards were not eligible post-01.04.2011. Services such as Pre-employment Health Checkup, Travel Agent, and Business Support Services were also not eligible due to lack of evidence or specific exclusions. 2. Credit Taken Subsequent to the Last Date of Export: The Tribunal noted that there is no requirement for one-to-one correlation between input and output services for claiming refunds under Rule 5 of the CENVAT Credit Rules, 2004. The rejection of refund on this ground was deemed unjustified, and the computation of eligible refund needs to be re-verified. 3. Inclusion of Unbilled Revenue in Total Turnover: The Tribunal recognized the appellant's argument that unbilled revenue should be included in the total turnover for computing eligible refunds. The matter requires re-examination by the Adjudicating Authority. 4. Application of the Correct Formula for Computing Eligible Refund: The Tribunal found that the authorities erred by using net credit instead of total credit for computing the refund. The correct formula should consider the total credit availed, as supported by various decisions. This issue needs re-evaluation by the Adjudicating Authority. 5. Export Turnover Restricted to Realization of Export Proceeds: Refund eligibility should be based on Foreign Inward Remittance Certificates (FIRCs). The Tribunal directed the Adjudicating Authority to re-verify the computation of eligible refunds considering the appellant's arguments. 6. Non-Mentioning of Service Tax Registration and Chartered Accountant Certificate Not Produced: The Tribunal opined that if the appellant can provide sufficient evidence of Service Tax payment, the rejected amount of Rs.9,280/- should be reconsidered. 7. Invoices Not Produced: The Tribunal upheld the rejection of Rs.13,147/- due to non-production of invoices and Rs.52/- for excess credit taken, deeming them ineligible for refund. 8. Incorrect Excess Credit Taken: The Tribunal upheld the rejection of Rs.52/- for excess credit taken, as it was deemed ineligible for refund. 9. Service Tax Not Charged by Service Provider: The Tribunal upheld the rejection of Rs.50,730/- as Service Tax was not charged by the service provider, making the refund ineligible. 10. Dispute Settled Under the Sabka Vishwas Scheme, 2019: The Tribunal acknowledged that settlement under the Sabka Vishwas Scheme does not imply admission of allegations. However, the settled amount of Rs.1,04,56,207/- cannot be claimed as a refund. The balance amount of Rs.38,70,647/- should be considered for refund. Conclusion: The Tribunal set aside the impugned orders and remanded the matter to the Original Authority for re-processing the refund claims in line with the Tribunal's observations and directions. The appeals were allowed by way of remand.
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