The CESTAT Allahabad Appellate Tribunal ruled in a case...

The CESTAT Allahabad Appellate Tribunal ruled in a case involving the demand of service tax for services rendered by a non-resident from a country outside India related to the issuance of Foreign Currency Convertible Bonds (FCCB) falling under banking and financial services. The appellant had paid the service tax under protest and deposited the amount demanded during the investigation. The tribunal held that the demand of service tax against the appellant was dropped, entitling them to a refund of the amount paid along with interest. The appellant had taken CENVAT credit of the amount deposited and distributed it to their manufacturing units as they were registered as an input service distributor. The tribunal found no reason to disallow the distribution of the credit, as the service tax was deemed not payable. The tribunal also noted that the show cause notice and impugned order did not cite any legal provisions for the recovery of CENVAT credit, rendering the recovery order invalid.