2013 (2) TMI 272 - AT - Service Tax

Tribunal upholds EOU's refund claim for CENVAT credit on diverse services under Notification No. 5/2006-CE

The Tribunal upheld the Commissioner (Appeals) decision in favor of the appellant, a 100% EOU, regarding the refund of unutilized CENVAT credit under ... Refund of un-utilized CENVAT credit - 100% EOU registered with STPI - Notification No. 5/2006-CE (N.T.) dated 14.03.2006 – Circular No. 120/01/2010-ST dated 19.01.2010 - Denied refund of service tax attributable to rent paid on car park – cafeteria - terrace of the building - in-house training of professionals - services of professionals like chartered accountant in preparation of returns/certificates in the course of their business activities – Held that:- Assessee has claimed that they have engaged the services of professionals for calculation of professional tax, income tax etc. These services are obviously in connection with the business activities of the assessee. Company employed more than 400 workers has taken the premises on rent excluding car park, cafeteria which are necessarily part and parcel of their business premises. In the facts and circumstances of the case, there is no justification to say that terrace of the building should not be treated as part of the business premises 'Outdoor Catering Services' the training services, and the professional services used by the assessee are all deserve to be treated as 'input services' in relation to their exports especially when they are 100% EOU coming under STPI scheme Revenue do not indicate any reason to question the validity of the finding of the Commissioner (Appeals) that these services should be as ‘input services' in relation to the ‘output services' rendered by the assessee. It merely says that the assessee has not made any attempt to prove that they are related to ‘output services'. Further, the ground relating to non-examination of fulfillment or otherwise of clause 5 of Notification was not a ground based on which original authority has rejected the refund claim. In favour of assessee Issues:Refund of unutilized CENVAT credit under Notification No. 5/2006-CE (N.T.) dated 14.03.2006.Analysis:The appeal before the Appellate Tribunal CESTAT Bangalore was filed by the department against the order of the Commissioner (Appeals) regarding the refund of unutilized CENVAT credit. The appellant, a 100% EOU registered with STPI, claimed a refund of Rs.4,26,698 for June 2008 under Notification No. 5/2006-CE. The original authority sanctioned a partial refund and rejected the balance amount. The Commissioner (Appeals) allowed the appeal with consequential benefit to the appellant.The department, through the Superintendent (AR), contended that the appellant failed to explain how the impugned services were used in providing taxable services exported by them. The department also argued that the conditions of Notification 5/2006-CE were not fulfilled. On the other hand, the respondent, represented by a CA, supported the order of the Commissioner (Appeals) and cited a Tribunal decision in a similar case.The Tribunal, after considering submissions from both sides and examining the records, found that the original authority denied credit on various services, including rent for car park, cafeteria, terrace, in-house training, and services of professionals like chartered accountants. However, the Commissioner (Appeals) allowed the credit on these input services based on a Board's Circular. The Tribunal noted that services related to business activities, such as professional tax calculation and income tax services, were justifiably claimed as input services by the assessee.The Tribunal further discussed the denial of credit on 'lunch and snacks' services, clarified as 'Outdoor Catering Services' by the respondent. It was highlighted that the company had over 400 employees during the relevant period, justifying the claim for such services as input services. The Tribunal also addressed the denial of credit for in-house training and emphasized that certain premises like car park, cafeteria, and terrace should be considered part of the business premises for the company.Moreover, the Tribunal emphasized that services like 'Outdoor Catering Services,' training services, and professional services used by the assessee should be treated as input services, especially for a 100% EOU under the STPI scheme. The Tribunal found no valid reasons to interfere with the Commissioner (Appeals) order, rejecting the department's appeal based on the grounds presented and the fulfillment of conditions under the relevant notification.