2024 (6) TMI 442 - AT - Service Tax

100% EOU wins refund appeal for unutilized CENVAT credit on service tax paid for input services

M/s AMD FAR EAST LTD. (INDIA BRANCH OFFICE) (NOW KNOW AS M/s AMD INDIA PVT., LTD.) Versus COMMISSIONER OF CENTRAL EXCISE, BANGALORE

The CESTAT Bangalore allowed the appeal filed by a 100% EOU seeking refund of unutilized CENVAT credit on service tax paid for input services. Revenue had ... 100% EOU - refund of unutilised CENVAT Credit of service tax paid on the input services under N/N. 5/2006-CE(NT) dated 14.03.2006 - export of services - denial of refund on the ground of no nexus between input services and service exported and non-submission of certain documents required for processing the refund claim - HELD THAT:- The revenue has held that the services provided by the appellant fall under the category of ‘Business Support Service’ and not ‘Business Auxiliary Service’. The issue pertaining to the previous period was considered by this Tribunal in appellant’s own case, AMD India Pvt., Ltd., Vs. CST [2015 (3) TMI 346 - CESTAT BANGALORE], Bangalore and allowed the appeal. The Learned Authorised Representative fairly admits that the issue is no more res integra, since this Tribunal has taken a view allowing the appeals. Further Board vide Circular No.111/05/2009-ST dated 24.02.2009 has also issued clarification in this regard. In the facts and circumstances of the case, it is found that there is on reason to interfere with the ratio of the decisions of the Tribunal, therefore the appeals are sustainable. Appeal allowed. Issues: Refund claim of unutilised CENVAT Credit for service tax paid on input services used for export of services under Notification No.5/2006-CE(NT); Classification of services rendered by the appellant as 'Business Support Service' or 'Business Auxiliary Service'; Nexus between input services and services exported; Rejection of refund claims by adjudicating authority; Appeal against rejection of refund claims; Previous decisions in appellant's own cases regarding classification of services as exports under 'Business Auxiliary Services'.Analysis:1. The appellant, a 100% EOU registered under 'Business Auxiliary service', filed refund claims for unutilised CENVAT Credit of service tax paid on input services used for export of services. Adjudicating authority rejected the claims citing lack of export of service under Export of Service Rules, 2005, and other reasons.2. The Commissioner (Appeals) rejected the appeals, stating that services provided by the appellant were ultimately used in India, not outside India, as they were related to marketing and promotion of products in India. The issue revolved around whether the services rendered could be considered as export of service.3. During the hearing, the Appellant argued that the services provided fell under 'Business Support Service' instead of 'Business Auxiliary Service' due to the recipient not being situated outside India. They also highlighted the classification of services under relevant sections of the Finance Act, 1994.4. The Appellant relied on previous decisions in their own cases and other cases to support their claim that their activity should be classified as exports under 'Business Auxiliary Services'.5. The Tribunal found that the revenue's classification of services as 'Business Support Service' was incorrect based on previous decisions in the appellant's own case, where it was held that the activity of provision of service in India did not preclude the claim for refund on grounds of export of service.6. The Tribunal noted that the issue was no longer res integra as previous decisions by the Tribunal had allowed similar appeals. The Board's circular also provided clarification on the issue.7. Considering the above discussion and the facts of the case, the Tribunal found no reason to interfere with the decisions of the Tribunal in previous cases and allowed the appeals with consequential relief.8. The appeals were allowed, and the decision was pronounced in Open Court on 03.05.2024.