2016 (12) TMI 1694 - AT - Service Tax

Tribunal grants refund for input services, except 'transport by air.' Decision favors appellant's arguments.

M/s. IKANOS COMMUNICATION (INDIA) PVT. LTD. Versus Commissioner of Service Tax BANGALORE-SERVICE TAX BANGALORE

The tribunal allowed the appellant's appeal regarding the rejection of a refund claim for input services, except for 'transport of goods by air.' The ... 100% EOU - Refund of unutilized CENVAT credit - various input services - Air Travel Agent Service - Business Auxiliary Services - Chartered Accountants Services - Clearing and forwarding agents services - CHA Services - Companies Secretaries Services - Courier Agency Services - Development and Supply of Content Services - Franchise services - General Insurance Services - Transportation of goods by Road - Outdoor cateringservice - Transport of goods by air - Works contract services - denial on account of nexus - Held that: - except for transport of goods by air, all other services on which refund has been denied on the ground that the said services are not input service is wrong - except transport of goods by air and for other services, the appellant is entitled to the said refund - appeal allowed in part. Issues:Refund claim rejection for various input services under Rule 5.Analysis:The appellant, a 100% EOU, filed a refund claim for input services used in providing output services. The original authority granted a partial refund and rejected the balance. The appellant appealed to the Commissioner (A) who also partly allowed the appeal. The appellant contended that the impugned order rejecting the refund claim was unsustainable as the services were input services. The appellant provided justifications and relied on various decisions to support their claim for each service.The appellant argued that the impugned order improperly rejected the refund claim without considering relevant legal principles and judgments supporting the classification of the services as input services. The appellant presented detailed justifications and cited specific legal precedents for each service to establish their entitlement to the refund. The appellant's contentions were supported by a comprehensive list of decisions for each service, emphasizing the essential nature of the input services in relation to the provision of output services.After hearing both parties and reviewing the submissions and judgments cited, the tribunal concluded that, except for 'transport of goods by air,' all other services for which the refund was denied were indeed input services. The tribunal held that the denial of refund on the grounds that these services did not qualify as input services was incorrect. Consequently, the tribunal set aside the impugned order and allowed the appeal of the appellant for all services except 'transport of goods by air.' The appellant was deemed entitled to the refund for the other services, with the appeal partly allowed and providing for consequential relief, if any.In summary, the tribunal's judgment addressed the appellant's challenge against the rejection of the refund claim for various input services. The tribunal carefully analyzed the arguments presented by both parties, scrutinized the justifications and legal precedents provided by the appellant, and ultimately ruled in favor of the appellant, allowing the refund claim for all services except 'transport of goods by air.'