2016 (12) TMI 988 - AT - Central Excise

Tribunal grants refund for input services to pharmaceutical EOU under CCR 2004

Apotex Research Pvt. Ltd. Versus The Commissioner of Central Excise

The Tribunal allowed the appeals, setting aside the Commissioner (A)'s order partially allowing refund of service tax credit under Rule 5 of CCR, 2004 for ... Refund - Cenvat credit - Rule 5 of CENVAT Credit Rules (CCR), 2004 - Held that: - the learned counsel submitted that this issue has already been decided in favour of the appellant by this Tribunal in the Final Order No.22070/2014 dated 21.11.2014 wherein this Tribunal relying upon the decision of the Hon’ble High Court of Karnataka in the case of CCE, Bangalore vs. Biocon Ltd. [2014 (9) TMI 716] wherein the Hon’ble High Court observed that if the assessee owns more than one unit and all the units are situated at one place, it would constitute a factory. No doubt the business support service also relates to the business operation and therefore fall in the definition of input service for which the appellant is entitled to refund but the appellant will have to satisfy the original authority by submitting the requisite documents that the said services were used in or in relation to the business - Appeal allowed - decided in favor of the assessee by way of remand. Issues:Refund of unutilised service tax credit under Rule 5 of CENVAT Credit Rules, 2004 for various services.Analysis:The appellants filed two appeals challenging the Commissioner (A)'s order partially allowing refund of service tax credit under Rule 5 of CCR, 2004 for specific services. The first appellate authority granted refund for some input services but rejected it for others, leading to the present appeals. The appellant, a 100% EOU manufacturing pharmaceutical products, claimed a refund of accumulated unutilised CENVAT credit for exports during a specific quarter. The adjudicating authority partially rejected the claim, citing lack of direct use of certain input services in manufacturing or providing output services. The first appellate authority further denied refund for specific services like management, maintenance, repair, manpower recruitment, business support, and security agency services. The appellant contested these rejections, arguing that the services in question fell under the definition of input services and were used in their business operations. They also provided a Chartered Accountant certificate to support their claim. The appellant contended that they were entitled to claim refund for services used at different premises due to centralized registration, citing a precedent where owning multiple units at one location constituted a factory.Regarding the business support service, the refund was denied due to document non-conformity with Rule 4A of the Service Tax Rules, 1994. Despite this, the service was acknowledged as falling within the definition of input service, making the appellant eligible for a refund pending submission of the required documents. The Tribunal held that the appellant was entitled to a refund for most input services based on previous decisions favoring them. The appeals were allowed, setting aside the impugned orders. However, the quantification of the refund for business support service was remanded to the original authority for further examination of submitted documents. The Tribunal disposed of both appeals with these specific directions.