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2024 (1) TMI 396 - AT - Service Tax100% EOU - refund of unutilized Cenvat credit - input services - quality and efficiency of the output service - nexus with output services - penalty under Rule 15 of CCR read with Sec 78 of Finance Act - HELD THAT:- The Court below summarily rejected the contentions of the Appellant, observing that the absence of such input services would not adversely impact the quality and efficiency of the output service provided by the Appellant/Assessee. This amounts to interfering and/or dictating how the Assessee should do their business, which is not the spirit of law - it is further observed that Rule 2(l) of CCR provides – input service means any service used by a provider of output service for providing an output service and includes services used in relation to renovation or repairs of the premises/factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, requirement of quality control, coaching and training, computer networking, etc. Thus, the definition provides for credit of both types of input services, the benefit of which is either received directly or indirectly. There is no such restriction in the definition under Rule 2(l) - the Order of the Court below is non-speaking and cryptic. Further, no penalty is exigible in the facts and circumstances as the issue is wholly interpretational. Accordingly, the penalty imposed and retained by the Court below under Rule 15 of CCR read with Sec 78 of the Act is set aside. Appeal allowed by remanding the matter back to the Original Adjudicating Authority to decide the SCN afresh, after considering the relevant Circular and the precedent decisions of various Courts as well as the explanations and clarifications provided by the Assessee.
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