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 Notification No. 5/2006-CE. The Tribunal allowed credit on various services including rent for car park, cafeteria, terrace, in-house training, and services of professionals, emphasizing these as valid input services. It rejected the department's appeal, finding no grounds to interfere with the Commissioner's decision based on the conditions of the notification being met.

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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.

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