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of <h1>Tribunal allows refund of service tax on essential input services for diamond import-export</h1> <h3>Commissioner of Central Excise, Puna-I Versus Rosy Blue (India) (P.) Ltd.</h3> Commissioner of Central Excise, Puna-I Versus Rosy Blue (India) (P.) Ltd. - 2016 (41) S.T.R. 994 (Tri. - Mumbai) Issues:Refund of service tax paid on input services related to banking and financial services, technical inspection, and certification services.Analysis:The appeals were filed by the Revenue against an Order-in-Appeal that allowed refund of service tax paid on input services to the respondent-assessees. The issue revolved around the refund of service tax paid on services like banking, financial, technical inspection, and certification. The respondent, engaged in diamond import and export, sought refund of CENVAT credit for service tax paid on various services. The adjudicating authority rejected the refund claim, but the first appellate authority upheld the rejection only for general insurance services. However, the impugned order was set aside concerning refund denial on banking and financial services and technical inspection and certification services.The Revenue contended that the refund claims did not align with Notification 17/2009-S.T., emphasizing that the services used for imports were not eligible for refund under the said notification. They argued that the services were related to imports, not exports, and that the notification must be strictly followed. The respondent's counsel argued that the services were essential for their export business, citing relevant case laws and court judgments supporting their position.Upon reviewing the submissions, the Tribunal found that the issue was narrow, focusing on whether the services were utilized for making goods exportable. The Tribunal disagreed with the Revenue's argument that the services were not linked to exports and were baseless. They emphasized that the respondent, engaged in diamond import and export, used the services for both import and export activities, making them eligible for CENVAT credit. The Tribunal referenced case laws to support their interpretation of the eligibility criteria for refund on input services.The Tribunal also highlighted the broad definition of 'input service' under the CENVAT Credit Rules, emphasizing that services indirectly related to manufacturing final products could be considered input services. They cited relevant provisions and judgments to support their conclusion that the banking charges were allowable as input services related to the business of manufacture. Consequently, the Tribunal upheld the impugned order, ruling in favor of the respondent and rejecting the Revenue's appeals.In conclusion, the Tribunal found the impugned order legally sound and without any flaws, leading to the rejection of the appeals filed by the Revenue. The judgment emphasized the eligibility of banking and financial services, as well as technical inspection and certification services, for refund under the CENVAT credit rules, based on their relevance to the business activities of the respondent in diamond import and export.
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