2014 (3) TMI 819 - AT - Service Tax

Denial of refund of unutilized CENVAT credit of service tax - Export of IT enabled servcies - Held that - appellant is eligible for the benefit of refund in respect of all the services in dispute and therefore appeal is allowed and the matter is remanded to the original adjudicating authority for considering the refund claim in accordance with law as regards other aspects except the eligibility in respect of the services - amount claimed is in accordance with the Notification which requires refund to be sanctioned on the basis of proportion of exports to the total turnover only. However since the matter is remanded to the original refund sanctioning authority he can verify whether this claim is correct or not - Decided in favour of assessee.

Summary

Issues:
1. Refund claim for unutilized CENVAT credit of service tax paid on input services.
2. Dispute over the amount disallowed by the appellate authority.
3. Eligibility of various input services for refund.

Issue 1: Refund claim for unutilized CENVAT credit of service tax paid on input services

The assessee, engaged in software development and IT enabled services, filed a refund claim for unutilized CENVAT credit of service tax paid on input services. The original authority and appellate authority allowed refunds for certain services, while the appellant disputed the disallowed amount. The total refund claim was Rs. 17,74,476, out of which Rs. 6,15,694 was allowed, and Rs. 6,56,184 remained in dispute. The appellant's claim was supported by a table detailing the nature of services and precedent decisions favoring the eligibility of these services as input services.

Issue 2: Dispute over the amount disallowed by the appellate authority

The appellate authority disallowed a portion of the refund claim, which the appellant did not contest, amounting to Rs. 3,64,986. The remaining disputed amount was Rs. 6,56,184. The learned Chartered Accountant provided details of services, their nature of utilization, and relevant precedent decisions supporting the eligibility of these services as input services. The appellate tribunal found the appellant eligible for the benefit of the refund for all disputed services and remanded the matter to the original adjudicating authority for further consideration in accordance with the law.

Issue 3: Eligibility of various input services for refund

The table presented by the Chartered Accountant outlined different categories of services, their nexus with input services, and supporting case laws. Services such as Management Consultants, Practicing Chartered Accountant, Erection, Commissioning & Installation, Real Estate Agents, Outdoor Catering, Telephone and Telegraph, Rent a Cab, Mandap Keeper, Cleaning, Consulting Engineering, Design, Event Management, Architects, and Business Auxiliary Services were deemed essential for the conduct of business and thus qualified as input services. The tribunal allowed the appeal and remanded the matter for further consideration, emphasizing the eligibility of the disputed services for the refund.

In conclusion, the appellate tribunal allowed the appeal, finding the appellant eligible for the refund of unutilized CENVAT credit on various input services. The matter was remanded to the original adjudicating authority for further review, except for the eligibility of the services in question. The Revenue's appeal was also considered, with verification of the claimed amount to be conducted by the refund sanctioning authority upon remand. Both appeals were decided based on the terms outlined in the judgment.