9911796707
TMI BlogNo direct Nexus required of Input Services vs. Output Services for Refund on ExportX X X X Extracts X X X X X X X X Extracts X X X X ..... No direct Nexus required of Input Services vs. Output Services for Refund on Export X X X X Extracts X X X X X X X X Extracts X X X X ..... red between input services and output services for refund? Facts: In the present case, M/s Kijiji (India) (P.) Ltd. (hereinafter referred to as appellants) was engaged in providing Business auxiliary services to their customers located abroad. The appellant filed a refund claim for the service tax paid on input services such as legal services, market data, payroll processing, customers support a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivities, etc., under Rule 5 of CENVAT Credit Rules, 2004, on the ground that they are unable to utilize the credit inasmuch as all their output services are exported. The same was examined and rejected by the adjudicating authority on two grounds namely: (i) there is no nexus between input services and output services and (ii) they have not submitted the invoices for the service tax paid on in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put services. The appellant preferred an appeal before the lower appellate authority. The Commissioner (Appeals) held that the appellant has submitted invoices in majority of the cases in respect of the input services on which they have claimed refund but rejected the refund claim only on the ground that there is no direct nexus between input services received and output service rendered. Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant filed an appeal before the Hon'ble CESTAT-Mumbai. Held: It was held that nature of the services received by the Appellant were essential for providing Business Auxiliary services which were exported and therefore, all services come within the purview of Rule 2(l) of Cenvat Credit Rules, 2004. The Tribunal has relied upon the decision in the case of CST v. Convergys India (P.) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . [2009 (5) TMI 50 - CESTAT, NEW DELHI] where it was held that when cost of goods and services becomes part of cost of final product or output services, such goods and services should be treated as input or input services for the purposes of CENVAT Credit Rules, 2004. Further, the Hon'ble Tribunal also take into consideration the decision of the Hon'ble Bombay High Court in the case of CCE v. Ultr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atech Cement Ltd. [2010 (10) TMI 13 - BOMBAY HIGH COURT ] wherein it was held that any service which has nexus with the business activity of the appellant, whether it is manufacturing or rendering service, has to be treated as "input service". Henceforth, it was concluded that appellant was rightly entitled for the refund of the service tax paid on input services which have been used in the rende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring of output services has been exported. Points to be noted: It may be drawn from the above judgment that it is not essential to have direct nexus between the input services and the output services provided. Those input services which are essential and forms part of providing output services can also be covered under the definition of input services under Rule 2(l) of Cenvat Credit Rules, 2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .
Bimal Jain
FCA, ACS, LLB, B.Com (Hons)
E-mail: [email protected] X X X X Extracts X X X X X X X X Extracts X X X X
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