2018 (2) TMI 1043 - AT - Service Tax

Tribunal grants refund for input services used in exports, emphasizing adherence to legal definitions and precedents.

The Tribunal allowed the appellant's three appeals, overturning the Commissioner (A)'s decision to deny refund claims on input services used for exported ... Refund of unutilized CENVAT credit - input services - Renting of Immovable Property Service - Event Management Service - Outdoor Catering service - Air Travel Agency service - denial on account of nexus - Held that: - In view of definition of input service as contained in Rule 2(l) of CENVAT Credit Rules, all these input services on which refund has been denied are related to the provisions of Export of Service - for the subsequent period, the Department itself has allowed the refund on certain services and this Tribunal in the appellant’s own case Commissioner of Service Tax Versus Nvidia Graphics Pvt Ltd [2017 (1) TMI 1081 - CESTAT BANGALORE] has allowed the refund on ‘Renting of Immovable Property service’ and “Event Management Service”. All these services fall in the definition of “input service” and the appellants are entitled to claim refund subject to verification of documents - appeal allowed by way of remand. Issues:Appeal against common impugned order dated 28.8.2017 passed by the Commissioner (A) regarding refund claims on input services used for exported services under Rule 5 of CENVAT Credit Rules, 2004.Analysis:The appellant filed three appeals against the common impugned order dated 28.8.2017 passed by the Commissioner (A), which partly allowed the appeal and modified the Order-in-Original. The appeals pertained to refund claims for unutilized CENVAT credit on input services used for exported services. The Original authority had partly sanctioned the refund on eligible input services but rejected amounts claimed for ineligible input services. The Commissioner (A) on appeal held certain services as eligible and others as ineligible, remanding the cases to the original authority for further examination. The original authority, after de novo adjudication, sanctioned a portion of the amount while rejecting the balance. The appellant then filed appeals before the Commissioner (A), who also modified the Orders-in-Original, leading to the present appeals.The appellant argued that the impugned order did not properly consider the definition of input service as per Rule 2(l) of CCR, 2004, and ignored judicial precedents. The appellant provided a list of rejected services and cited relevant case laws to support their claim that the rejected services were indeed input services. The Commissioner (A) rejected the refund on 'Outdoor Catering and Air Travel Agency' services due to insufficient documentation. The appellant contended that all services were used for rendering output services, with specific references to case laws supporting their position.After hearing both parties, the Tribunal found that the impugned order denying the refund on input services lacked sustainability in law due to the absence of a nexus. The Tribunal noted that all rejected input services were related to the export of services and fell within the definition of input service under Rule 2(l) of CENVAT Credit Rules. Citing precedents and decisions in the appellant's own case, the Tribunal concluded that the appellant was entitled to claim a refund subject to document verification. Therefore, the Tribunal allowed all three appeals, directing the original authority to verify the documents and sanction the refund accordingly.In conclusion, the Tribunal's decision favored the appellant, allowing the refund claims on input services used for exported services, emphasizing the applicability of the input service definition and supporting precedents.