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of <h1>Refund claim denial reversed for wrong service classification; proper adjudication process not followed</h1> <h3>Warburg Pincus India Pvt. Ltd. Versus Commissioner of Service Tax-I, Mumbai</h3> Warburg Pincus India Pvt. Ltd. Versus Commissioner of Service Tax-I, Mumbai - 2018 (364) E.L.T. 159 (Tri. - Mumbai) Issues:Whether rejection of refund claim on the ground of certain services not being admissible input services is correct.Analysis:The main issue in the judgment was whether the rejection of a refund claim based on the ground that certain services were not admissible input services was correct. The appellant argued that the refund claim was rejected without issuing a show cause notice for denial of the cenvat credit on these services, which was improper. The appellant contended that the services in question, such as courier agency services, hotel accommodation, restaurant services, mandap keeper, and club or association membership services, were essential for providing the output service. The appellant relied on various judgments to support their claim that these services were admissible input services.The Assistant Commissioner representing the Revenue reiterated the findings of the impugned order, which rejected part of the refund claim on the basis that certain services were not admissible.Upon careful consideration of the arguments presented by both sides and a review of the records, the Member (Judicial) found that the adjudicating authority's rejection of part of the refund claim without following the proper process of adjudication was illegal and arbitrary. The Member noted that if the authority believed certain input services were not admissible for cenvat credit, a separate show cause notice should have been issued, followed by a proper adjudication process. The Member further observed that the services in question were directly used by the appellant for providing output services, and previous judgments consistently held that these services were indeed admissible input services. Therefore, the Member concluded that the rejection of the refund claim on the service tax paid for these input services was not legal and proper.Consequently, the impugned order was modified, and the appeals were allowed in favor of the appellant. The judgment was pronounced in court on 13.3.2018.
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