CESTAT Bangalore: Refund claim denied for accumulated credit; Remanded for further determination

The Appellate Tribunal CESTAT BANGALORE rejected the appellant's refund claim for accumulated credit due to common services not being distributed between the E.O.U. and STPI as per the concept of 'input service distributor'. The Tribunal found that denial of credit based solely on units being in the same premises was unjustified. The appellant's request for a remand to the original authority to decide the nexus issue for each input service was granted, and the matter was remanded for further determination based on previous decisions and additional relevant judgments.

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Issues: Refund claim rejection due to common services and nexus with export of goods.

In the judgment by Appellate Tribunal CESTAT BANGALORE, the refund claim of the appellant for accumulated credit from April 2012 to June 2012 was rejected because some services were considered common and should have been distributed between the E.O.U. and STPI as per the concept of 'input service distributor'. It was noted that services exclusively used by E.O.U. without nexus to export of goods cannot be refunded. The appellant argued that since STPI and E.O.U. were in the same premises but registered separately, there was no need for credit distribution. The Tribunal agreed, stating that credit denial based on units being in the same premises was unjustified.

Regarding the nexus issue, the Tribunal referred to a previous Interim Order in the case of M/s Apotex Research (P) Ltd. & Ors. The appellant requested a remand to the original authority to decide the nexus issue for each input service in line with the Interim Order and other relevant decisions. Consequently, the Tribunal set aside the order requiring input distributor registration and remanded the matter to determine nexus based on their previous decision and additional relevant judgments to be presented. The operative part of the order was pronounced in open court.

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