2023 (9) TMI 566

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....rt of the above taxable service. They used various input services viz., commercial or industrial construction, erection, commissioning or installation, security service, air travel agent, chartered accountant, cleaning activity, commercial training or coaching, courier, manpower recruitment or supply, rent-a-cab operator, scientific or technical consultancy, management, maintenance or repair and telecommunication, which were used for rendering the said output service. They availed Cenvat credit on such input services and exported their output service without payment of Service Tax. 3. Rule 5 of the Cenvat Credit Rules, 2004 stipulates that where inputs/ input services are used in providing output services which are exported, then the Cenvat Credit in respect of the input or inputs services so used shall be allowed to be utilized by the output service provider toward payment of Service Tax on the output service, and where for any reason such payment is not possible, the provider of such output service shall be allowed refund of such amount subject to such safe guards, conditions and limitations as specified. On dated 08.02.2008 the Respondent filed a claim for refund of Cenvat Cr....

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....ic or Technical Consultancy Service (iv) Security Agencies Services (v) Air Travel Agent (vi) Chartered Accountant service (vii) Cleaning Service (viii) Commercial Training or Coaching Service (ix) Courier Service (x) Manpower Recruitment Agency and (xi) Rent-a-Cab Scheme Operator Service did not have any link/correlation with the development of Software for the quarter ending January, 2008 to March, 2008 under the provisions of Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 05/2006-CE (NT) dated 14.03.2006. 6. The Appellant stated that Rule 5 of the Cenvat Credit Rules, 2004 vide notification No. 5/2006-CE (NT) dated 14.03.2006, as amended, has prescribed certain conditions and limitations for such refund. A plain reading of Rule 5 clearly reveals that only such Cenvat Credit availed in respect of any inputs or input services which are used in providing the output services exported are eligible for refund. The refund of Cenvat Credit in respect of input services which are not used in the exported goods are not permitted. Thus, any person claiming refund under Rule 5 must prove to the satisfaction of the sanctioning authority that the input services on which ....

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.... of the Cenvat Credit Rules and hence the eligibility issue could not have been raised in the refund proceedings. 10. The Respondent relied on the Board Circular No.120/01/2010 - ST dated 19.01.2010, wherein at para 3.1.1 it was clarified that as regards the extent of nexus between the inputs/input services and the export goods/services, it must be borne in mind that the purpose is to refund the credit that has already been taken. There cannot be different yardsticks for establishing the nexus for taking of credit and for refund of credit. It is settled position of law that Board Circulars are binding on the Department as per the Supreme Court decision in CCE Vs. Dhiren Chemical Industries 2002 (139) ELT 3 (SC). Accordingly, the Respondent stated that denial of refund on the ground that the said eleven input services were not used in providing output services is legally not tenable. 11. The Ld. A.R. reiterated the points mentioned in the grounds of appeal filed by the Department. He also submitted that there was some calculation error in sanctioning of the refund to the Respondent. 12. Heard both sides and perused the appeal records. 13. Before going into the merits of ....

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....im of Rs.90,88,508/-, the lower authority had rejected an amount of Rs.88,09,859/- on the ground that the input services such as (i) Commercial and Industrial Construction Service, (ii) Erection, Commissioning and Installation Service, (iii) Scientific and Technical Consultation Service, (iv) Cleaning Activity Service, (v) Commercial Training and Coaching Service, (vi) Courier Service, (vii) Manpower Recruitment Agency Service, (viii) Rent-a-Cab service, did not have any link / co-relation with the development of software. 6. I have also gone through the Notification No. 5/2006-CE (NT), dated 14.03.2006. This said Notification has been amended vide Notification No. 7/2010-CE(NT), dated 27.02.2010 so as to substitute the words "used in" with the words "used in or in relation to" occurring in clause (a) and the word "used in" with the words "used for" in clause (bf) of the said notification. The above changes ensured that the provisions of refund under the notification and under the said rules get aligned and that refund is granted on all goods or services on which cenvat can be claimed by the exporter. The Board vide letter No. D.O.F. No. 334/1/2010- TRU, dated 26.02.2010, ....