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TMI Blog2020 (10) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... device to enlarge the meaning of the word defined and it expands the meaning of the basic definition - In the present case, since some portion of the disputed Cenvat credit was availed by the appellant after amendment of the definition of input service w.e.f. 01.04.2011 for the alleged personal benefit of its employees, as per the statutory provisions, the Cenvat credit shall not be available on the disputed services. The impugned order has not quantified the service tax amount availed by the appellant before 01.04.2011 and the period thereafter. Thus, the matter is required to be examined at the original stage for ascertaining the quantum of Cenvat credit availed by the appellant for the period after 01.04.2011 and if such availment of credit is in context with the services for personal use or consumption of the employees, then the benefit of Cenvat credit should not be available to the appellant - matter on remand. Refund of CENVAT credit - non-invocation of provisions of Rule 14 ibid at the stage of availment of alleged Cenvat credit - HELD THAT:- In the present case, it is an undisputed fact on record that the department had not proceeded against the appellant for eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit of service tax on Health Insurance, Cargo Handling and Photography Services were irregularly availed by the appellant during the period 2009-10 to 2011-12 (up to February, 2012). The learned Commissioner (Appeals) vide the impugned order dated 26.02.2014 has upheld rejection of refund claim of ₹ 96,20,945/- filed by the appellant on the ground that there was no nexus between the input services and the output service exported by the appellant. Another ground assigned in the said order for denial of the refund benefit of ₹ 65,32,930/- was that the appellant had not applied the formula correctly as prescribed under Notification No. 5/2006 C.E. (N.T.) dated 14.03.2006; the period of dispute involved in this case is from July 2008 to September 2011. In the impugned order dated 26.03.2014, the learned Commissioner (Appeals) has upheld rejection of refund claim of ₹ 83,33,716/- on the ground that the input services do not have nexus with the output services; the disputed period in this case is from October to December 2012. 2. Briefly stated, the facts of the case are that the appellant herein is engaged in providing output services under the taxable categor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d orders cannot be sustained under the provisions of law: (i) Commissioner of C. Ex., Bangalore-II Vs. Millipore India Pvt. Ltd. - 2012 (26) STR 514 (Kar.) (ii) Commissioner of Central Excise Vs. HCL Technologies 2015 (37) S.T.R. 716 (All.) (iii) Atlas Documentary Facilitators Company (P) Ltd. Vs. C.S.T., Mumbai-I - 2017 (5) STR 22 (Tri-Mumbai) (iv) LG Electronics India Pvt. Ltd. Vs. Commissioner of C. Ex. S.T., Noida - 2016 (44) STR 97 (Tri.All.) (v) Accenture Services Pvt. Ltd. Vs. Commissioner of S.T., Mumbai-II - 2015 (40) S.T.R. 719 (Tri.-Mumbai) (vi) Sai Adventium Pharma Ltd. Vs. C.C.E., Cus. S.T., Hyderabad-IV - 2016 (45) STR 185 (Tri Bang.) (vii) Commr. of C.Ex. Delhi Delhi III Vs, Convergys India Services Pvt. Ltd. 2017 (48) S.T.R. 173 (Tri.-Chan.) (viii) Commissioner of Service Tax, Mumbai-II Vs. WNS Global Services - 2016 (44) STR 454 (Tri-Mumbai) (ix) Commissioner CGST, Mumbai Central Excise Vs. Morgan Stanely Investment Management - 2018 (5) TMI 400 CESTAT Mumbai 4. On the other hand, the learned AR appearing for the Revenue reiterated the findings recorded in the impugned order and supported the case of Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly finding place in the inclusive part of the definition of input service . The inclusive definition in a fiscal statute is a well recognized device to enlarge the meaning of the word defined and it expands the meaning of the basic definition. The facts in these cases are not in dispute that the expenses incurred by the appellant for using the disputed services were meant for accomplishing the business activities and also the same form part of the cost of the ultimate services provided by the appellant. The Hon'ble Karnataka High Court in the case of Milipore India Pvt. Ltd. (supra) has extended the credit facility on group personal accident policy, holding that availment of such service by the assessee is towards 'activities relating to business' of manufacture of excisable goods and that the premium paid on insurance policies are part of salaries of employees and elements of cost of production covered under the CAS-4. The said view has also been endorsed by the Hon'ble Allahabad High Court in the case of HCL Technologies (supra). Thus, under the un-amended definition of input service (effective up to 31.03.2011), the above disputed services should fall within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision is for initiation of show cause proceedings within the stipulated time frame and thereafter, for adjudication of the dispute arising there from. In the present case, it is an undisputed fact on record that the department had not proceeded against the appellant for effecting recovery of the allegedly availed irregular Cenvat credit, by taking recourse to Rule 14 ibid read with Section 73 ibid. On the other hand, the department had raised the issue of non-establishment of nexus between the input services and exported output service for the first time, while adjudicating the subject refund claims filed under Rule 5 ibid by the appellant. 8.1 A service provider is permitted under the Cenvat statute to take credit on the input or input service used in output service, which is exported by it. The credit so taken by such type of service provider is allowed for utilization for payment of service tax on the output service. However, For any reason, where such credit adjustment is not possible, a service provider is allowed for refund of such credit amount, subject to fulfilment of the conditions and limitations, as may be specified by the Central Government by way of issuance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to be refunded in the ratio of the export turnover to total turnover . 8.2 On a conjoint reading of the statutory provisions and the notifications issued by the Central Government from time to time, it transpires that input services may not necessarily be used directly in provision of the output service and use of such services in or in relation to also meet the requirement of Rule 5 ibid for the purpose of refund benefit. While interpreting the expression in relation to used in the statute, the Hon ble Supreme Court in the case of Doypack Systems Pvt. Ltd. Vs. Union of India [1988 (36) ELT 201 (S.C.)] has held that the said phrase is equivalent to or synonymous with pertaining to and concerned with and therefore, the said phrase has a very broad connotation and cannot be given a narrow meaning. In view of the settled position of law, there is no requirement of establishing one to one correlation between the input services and the output service. Based on adoption of prescribed formula, the refund application alone should be processed and settled by the department and the aspect of direct nexus or correlation between the input service and output service should not b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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