2024 (9) TMI 1024 - AT - Service Tax

Accumulated CENVAT credit refund allowed for input services used in export of goods under Rule 5

M/s. Northern Operating Service Pvt. Ltd. Versus Commissioner of Service Tax, Division – III, Bangalore

CESTAT Bangalore allowed appeals regarding CENVAT credit refund for input services. The appellant sought cash refund of accumulated CENVAT credit on ... CENVAT Credit - input services - accumulated credit on account of export of goods made during the relevant quarters under Rule 5 of CENVAT Credit Rules, 2004 - HELD THAT:- Since the input services in various decisions are held to be admissible to credit, therefore, denial of cash refund of accumulated CENVAT credit on export of services by the appellant during the relevant period cannot be denied. Reliance placed in GOLFLINKS SOFTWARE PARK PVT LTD VERSUS C.C.E & C.S.T. -BANGALORE [2018 (8) TMI 331 - CESTAT BANGALORE] and OMEGA HEALTHCARE MANAGEMENT SERVICES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX, BENGALURU EAST [2021 (8) TMI 875 - CESTAT BANGALORE]. Appeals are allowed. Issues Involved:1. Admissibility of CENVAT credit on various input services.2. Eligibility for cash refund of accumulated CENVAT credit on export of services.Issue-wise Detailed Analysis:1. Admissibility of CENVAT Credit on Various Input Services:The appellants, registered under multiple taxable service categories, availed CENVAT credit on input services utilized for providing export services. They filed refund claims for the accumulated CENVAT credit on these input services under Rule 5 of the CENVAT Credit Rules, 2004, read with relevant notifications. The authorities allowed major portions of the refund but denied certain input services, arguing they did not qualify as 'input services.' The contested services included Air Travel Service, Banking and Other Financial Services, Club or Association Membership Fee, Credit Card, Debit Card Service, Event Management Service, Management or Business Consultancy Service, Real Estate Agency Service, among others.The Tribunal examined whether these input services were admissible for CENVAT credit, referencing various judgments. The findings were as follows:- Real Estate Agent Service: Essential for identifying premises for business operations. Supported by judgments in Golflinks Software Park Pvt Ltd, Omega Healthcare Management Services Private Limited, Mercedes Benz Research & Development India Pvt. Ltd., and Xilinx India Technology Services Pvt Ltd.- Management/Business Consultant: Used to obtain technical knowledge for business enhancement. Supported by M/S. Steria India Ltd., Super Packs, and Xilinx India Tec. Services Pvt Ltd.- Air Travel Service: Used for employee travel for business purposes. Supported by M/s. Neutral Glass & Allied Industries Pvt Ltd, M/s. Bell Ceramics Ltd, Dr. Reddy's Lab. Ltd., and Commissioner Of Central Excise & Cgst, Meerut-I.- Credit Cards, Debit Cards Services: Expenses on food cards for employees. Supported by RMZ Infotech Pvt. Ltd. and M/s. Fidelity Business Services India Pvt Ltd.- Event Management Service: For organizing business-related seminars and events. Supported by Toyota Kirloskar Motor Private Limited and DBOI Global Services Pvt. Ltd.- Outdoor Catering Service: For employee welfare. Supported by Commissioner of Central Excise Jaipur, Commissioner Of Central Excise, Customs and Service Tax, Vadodara, and Commissioner of Central Excise v. HCL Technologies.- Banking or Financial Service: For foreign currency purchase for business purposes. Supported by M/s. Societe Genereale Global Solutions Pvt Ltd and M/s. Shree Sai Calnates India Pvt Ltd.- Club or Association Membership Fees: For market-related information and industry standards. Supported by Commissioner Of Central Excise Jaipur, M/s. GMM Pfaudler Ltd., and M/s. Aia Engineering Ltd.- Design Service: For employee appreciation awards. Supported by M/s. 24/7 Customer Pvt Ltd and M/s. Gmm Pfaudler Ltd.- House Brokering Service: For identifying business premises. Supported by Omega Healthcare Management Services Private Limited and RMZ Infotech Pvt. Ltd.- Construction: For minor construction and maintenance of business premises. Supported by M/s. Yazaki India Pvt. Ltd. and M/s Ion Exchange I Ltd.- Supply of Tangible Goods: For equipment essential for business operations. Supported by M/s. JSW Steel Ltd and CCE, Hyderabad Vs Deloitte Tax Services India Pvt Ltd.- Health Club & Fitness Centre: For employee welfare. Supported by Commissioner of Central Excise v. HCL Technologies and Accenture Services Pvt. Ltd.- Tour Operator Service: For employee travel for business purposes. Supported by M/s. Yazaki India Pvt. Ltd. and M/s. VFC Industries Pvt Ltd.2. Eligibility for Cash Refund of Accumulated CENVAT Credit on Export of Services:The Tribunal held that since the input services mentioned above were deemed admissible for CENVAT credit in various judgments, the denial of cash refund for the accumulated CENVAT credit on export of services during the relevant period was unjustified. Consequently, the impugned orders were modified to allow the credit on these services, and the appeals were allowed on these terms.Conclusion:The Tribunal concluded that the input services in question were admissible for CENVAT credit and, therefore, the appellants were entitled to a cash refund of the accumulated CENVAT credit on export services for the relevant periods. The appeals were allowed, and the impugned orders were modified accordingly.(Operative portion of the order was dictated and pronounced in Open Court on 13.08.2024.)