TaxTMI 
TaxTMI 
2025 (12) TMI 1252
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....fied under Business Auxiliary Services) to its overseas affiliate, GE Consumer Finance Americas. During the pre-GST regime, the appellant was registered with the Service Tax Department and availed CENVAT credit on various input services used for providing its output services. For the period October 2012 to December 2012, in appeal no. ST/22200/2014, the appellant filed a refund claim of Rs. 82,77,939/- for unutilized CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004 (CCR) read with Notification No. 27/2012-CE(NT) dated 18.06.2012. The then Deputy Commissioner, Service Tax, Hyderabad-IV Commissionerate, sanctioned refund of Rs. 44,98,660/- but rejected Rs. 37,79,279/- on the ground that certain input services were not essential for providing output services and lacked direct nexus. Aggrieved by this order, on appeal by the appellant before the Commissioner (Appeals), who, inter alia, rejected the appeal on similar grounds, relying on certain judicial precedents to hold that the disputed input services did not have the required nexus with the exported output services. For the period January 2011 to March 2012, in Appeal No.ST/22202/2014, the appellant accumulated CENVAT cre....
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.... of engineering as well as of laws and statutes. These services help in making the operations of the company/unit more cost-efficient. These services are directly relatable to export of services, and such refunds play a very crucial role in exporting services and to keep cash flow healthy. Learned CA in this regard rely on the judgment of Hon'ble Ahmedabad Tribunal in the case of Commissioner of Central Excise, Ahmedabad Vs Ahmedabad Strips Pvt Ltd., [2014 (33) STR 291 (Tri-Ahmd)], wherein, the Hon'ble Bench has held that the service tax paid on "professional and liaisoning services" towards claiming exports refund is treated as eligible for input service credit. Applying the judgment squarely, he also relies on the following case laws: a) M/s Kijji (India) Pvt Ltd., Vs Commissioner of Central Excise, Mumbai-I [2012-TIOL-1854-CESTAT-MUM] b) Commissioner of Central Excise, Hyderabad-IV Vs Deloitte Tax Services India Pvt Ltd., [2008-TIOL-629-CESTAT-Bang] Whereas, Learned AR of Department submits that the description mentioned is retainership fee for labour law service, filing of appeal in CESTAT etc. 2. Commercial Training or Coaching Services: ....
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....viding output services, and same is not specifically excluded from the definition of input services. These services are required for the maintenance or upkeep of the hardware, equipment and other infrastructure of the appellant without which the appellant cannot perform its business operations. Whereas, Learned AR of Department submits that they availed the above service for symon boards shifting, dummying the drain valves, laying and installation of data / voice ports. They have no direct nexus with their output service which was exported and hence not eligible for refund of Cenvat Credit. 5. Courier Services: Learned CA submits that the categorized services are specifically used for providing output services, and same is not specifically excluded from the definition of input services. Courier services are required for sending documents to the customers or the vendors, which is an integral part of the appellant's business. Leaned CA again relied on the judgment of Deloitte Tax Services India Pvt Ltd., supra, as affirmed by the Hon'ble Andhra Pradesh High Court. Whereas, Learned AR of Department submits that courier services are required for send....
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....rtains to F & F processing, payroll processing. One invoices is not furnished. The service as such has no direct nexus and hence not eligible for refund of Cenvat Credit. 9. Business Support Service: Learned CA submits that the input services are used in relation for export of services. Further, Circular No. 120/01/2010-ST dated January 19, 2010 in para 3.1.2 clarifies that maintenance of equipment (here servers) are directly relatable to export business. Whereas, Learned AR of Department submits that the description of services rendered has no nexus to the output service exported. 10. Information Technology Software Services: Learned CA submits that the categorized services are specifically used for providing output services, and same is not specifically excluded from the definition of input services. Every business requires some kind of software as per the requirement of their business mode, therefore appellant to provide output service exported requires packaged or customized software. Hence, the service tax paid on such services is directly in nexus with services exported by the appellant and eligible for refund. Whereas, Le....
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....e for interior decoration of their office premises. Not considered for grant of refund of service tax paid on this service as the same do not have direct nexus with their output service which was exported. 15. Broadcasting Services: Learned CA submits that the Cenvat Credit availed on this service is allowed Thus service is admissible. 16. Cargo Handling/Custom House Agent Services: Learned CA submits that the services of the customs house agent is required to complete various export documentation of the Company which are essential to deliver the services such as service charges for bonding, debonding, renewals of licenses and approval of import material from STPL and import procurement certificate from STPI. The Learned Deputy Commissioner in appellants own case vide OIO No. 195/2013 dated 26.09.2013 has granted refund towards these impugned services for the period June 2007 to May 2008 and rejected during this impugned period. Appellant further wish to submit that the definition of input service with respect to this impugned service has been same even for this disputed period. 17. Cleaning Activity Service: Learned CA submits ....
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....he services of General Insurance are essentially to secure and cover any business risk which may occur due to some unexpected event. Thus, General Insurance being an activity relating to the business, the Appellant is eligible for CENVAT credit on such services. Whereas, Learned AR of Department submits that it is the human resources which are the main inputs in a service industry and insurance of such employees is the utmost priority of the company, which is thereby relevant for exporting of the services. Further, travel Insurance of the senior management staff is also key factor in exporting the services. That the absence of such a vital input service would not adversely impact on the quality and efficiency of the provision of service exported and thus the said input service is not considered as eligible input service. 21. Legal Consultancy Services: Learned CA submits that the improvement and strengthening of systems in the business is a continuous process. These services are consumed in relation obtaining expert opinions and advice regarding the efficiency of and control over internal management systems like the auditing of working systems, IT systems....
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....this service as the same do not have direct nexus with their output service which was exported. 24. Club or Association Service: Learned CA submits that these are towards membership fees to various organization like CII, etc., which represent the interest and concern of the company before Government. An entity can raise specific business, industry or economic matters before the Government for the purpose of clarification or redressal of grievance through the above bodies. In order to avail their services, it is incumbent on the part of an entity to become a member therof. Thus, the membership fee paid by the company to the above bodies can be construed to be directly in relation to their business and qualify as eligible input service. 25. Online Information and Database Access or Retrieval Services: Learned CA submits that online Information and database access or retrieval services provide data or information retrievable or otherwise, to any person, in electronic form through a computer network. Computer network means interconnection of one or more computers. Whereas, Learned AR of Department submits that they availed the above service ....
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....013 has granted refund towards these impugned services for the period June 2007 to May 2008 and rejected during this impugned period. Appellant further wish to submit that the definition of input service with respect to this impugned service has been same even for this disputed period. 6. The appellant continues to operate as a 100% EOU, providing call centre services exclusively to its overseas affiliate. The nature of input services and their utilization in the business operations remains consistent with the earlier periods and subsequent periods during which refunds were duly sanctioned. The facts and circumstances of the present case are identical to those considered in the previous/subsequent refund application, which were approved by both the Adjudicating authority and the Commissioner (Appeals) through Order-in-Original and Orders-in-Appeal. 7. Heard both the parties and perused the records. Issues are identical, parties are same, So heard simultaneous to decide together. 8. Cenvat Credit Rules, 2004, inter alia, permits taking of credit of inputs and input services which are used for providing output services. Rule 5 of Cenvat Credit Rules, 2004 provides that accum....
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....e used for, (a) construction of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or (B) specified in sub-clauses (d), (o), (zo) and (zzzzj) of clause (105) of section 65 of the Finance Act, in so far as they relate to a motor vehicle except when used for the provision of taxable services for which the credit on motor vehicle is available as capital goods; or (C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee. 9. Due to some difficulties faced by the exporting etc., regarding refund claims, the board issued Circular No. 120/01/2010-ST. The relevant para of the circular as follows: "3.1.1 The primary objection indicated by the field formations is that the la....
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....e eligible both for taking the credit and the refund thereof. On the other hand, activities like event management, such as company-sponsored dinners/picnics/tours, flower arrangements, mandap keepers, hydrant sprinkler systems (that is, services which can be called as recreational or used for beautification of premises), rest houses etc. prima facie would not appear to impact the efficiency in providing the output services, unless adequate justification is shown regarding their need". 10. The findings of Commissioner (appeals) in impugned order related to Appeal No. 22202/2014, are important to mention especially the relevant para, as follow: "8.1 The lower authority has held that the input service i.e Banking and other Financial Services, Business, Support Service, Charted Accountant Services, Commercial Training or Coaching Service, Information Technology Software Service, Internet Telecommunication Service, Management Consultancy Service, Management, Maintenance or Repair Service, Management or Business Consultants Service, Manpower Recruitment or Supply Agency Service, Renting of Immovable Property Service, Security Agency Service and Telecommunication Service etc.,....
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.... the Hon'ble Tribunal in the case of CCE, Raipur Vs HEG Ltd., reported in [2010 (18) S.T.R 446 (Tri-Del) has held that: Cenvat Credit of Service Tax - Input service - Rent-a-cab Service used in connection with the business activities of the company - Credit admissible - Rules 2 (l), 3 and 14 of Cenvat Credit Rules, 2004. [2008 (12) S.T.R. 598 (Tribunal)] 9.1 Following the ratio of the above judgements and Boards circular, I allow the Service Tax credit of Rent-a-Cab Service form January, 2011 to 31.03.2011. However, the lower authority is directed to restrict the credit to the extent eligible, for picking up and dropping the employees from their residence to offices working on 24x7 basis and also examine the issue in the light of case law of Titan Industries Ltd., Vs Commissioner of Central Excise, Bangalore-I [2011(23)S.T.R.600(Tri-Bang), wherein it is held that if the company employees had borne the burden of Service Tax paid on 'Rent-a-Cab Service', the appellant cannot claim CENVAT credit thereof." 11. In view of the Services provided by the appellant like Management or Business Consultant Services, Commercial Training or Coaching Services, Telecommunicatio....
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.... S.T.R. 342 (Tri-Bang)], M/s Resil Chemicals Pvt Ltd., Vs Commissioner of Central Excise,, Bangalore [2011-TIOL-20-CESTAT-BANG], Leela Scottish Lace Pvt Ltd., Vs Commissioner of Customs, Bangalore [2010 (19) S.T.R. 69 (Tri-Bang)], Commissioner of Central Excise, Hyderabad-Iv Vs Deloitte Tax Services India Pvt Ltd., [2008-Tiol-629-CESTAT-BANG], and Tribunal in the case of Narmada Gelatines Ltd., Vs Commissioner of Central Excise, Bhopal [2009 (13) S.T.R.506 (Tri-Del)], similar view has been taken that the Cenvat Credit on these services are admissible. Even, Learned Commissioner in appellant's own case vide OIO No. 195/2013 dated 26.09.2013 has granted refund towards the services for the period June 2007 to may 2008. In this regard it is important to cite Hon'ble Supreme Court decision in Union of India Vs Kamalakshi Finance Corporation Ltd., [1991 (55) E.L.T. 433 (S.C)], where in it has held that the Department cannot arbitrarily take a contrary stand for subsequent periods without valid justification. 17. In so far as Cleaning Activity Service used for cleaning and maintenance services is covered, it is used for disinfecting, exterminating, cleaning, maintaining and sterilizing....