2024-VIL-370-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax - Input service – Denial of refund of Cenvat credit on the ground of nexus of input services with the output services and mismatch of figures of the refund claims and Cenvat credit reflected in relevant ST-3 returns – HELD - The definition of ‘input service’ prior to 1.4.2011 had wide ambit as it included the words “activities relating to business”. Further, in case of output services provider as per first limb of definition of ‘input services’ under Rule 2(l) of CCR 2004, it is merely sufficient to establish that input services were used for providing output services. The first limb of the definition does not use the words ‘directly’ and merely says ‘inputs used for providing output services’ - The finding of Ld. Commissioner (Appeals) that the appellant has not established that input services were directly used for providing output service is adding words into the definition of “input service” and therefore not acceptable - appellant is eligible for the refund of credit of input service prior to 1.4.2011 – Denial of refund for the reason that the input service did not have nexus with the output service, is set aside – Since there is difference in amounts as reflected in the ST-3 returns as well as refund claim, the entire matter requires to be remanded to the adjudicating authority to reconsider afresh, the claims which have been rejected - The impugned orders are set aside and the appeals are allowed by way of remand - Difference in the amount of the cenvat credit disclosed in the ST-3 returns and the refund of credit filed by the appellant for the relevant period – HELD - It is submitted by the Ld. Consultant that the refund claim filed by them is higher than the amount of credit disclosed in the ST-3 returns, and that there is difference of more than Rs.5 lakhs - it is not forthcoming from records as to which of the services this difference in amount is spread over. For this reason, the matter requires to be remanded. In case the appellant is able to furnish that they have availed these input services of higher amount, the original authority is directed to consider as per law and as per findings rendered in this order - Unregistered premises – HELD – Following the judgement of the Hon’ble Karnataka High Court in the case of mPortal India Wireless Solutions P. Ltd. Vs CST Bangalore it is held that credit cannot be denied for the reason that the premises is not registered - Rejection of refund claim on this grounds is not justified - Grant of interest on delayed refund – HELD - It is brought out that the appellant was issued several deficiency memos as they had not produced the necessary documents at the time of availing refund claim. So also, there is difference in the amount of the refund claim and the amount of credit disclosed in the ST-3 returns. All these require much correlation and consideration by the adjudicating authority. For these reasons, there is no ground to grant interest as there is not much delay in sanctioning refund. The issue of interest on delayed refund is held against the appellant and in favour of the Department - Renting of Immovable Property Services (Parking Service), Air Travel Agency Service, Photography Service, Management Consultancy Service, Commercial or Coaching Service, Event Management Service, Supply of Tangible Goods service, Service tax on out of pocket expenses, Security agency services, Pandhal & Shamina Services – HELD – the services described in the table furnished by appellant do not fall under the exclusion clause of definition of input services (post--1.4.2011). The department therefore cannot reject the refund alleging that the services do not have nexus with output services - original authority is directed to verify the invoices as well as the services of the air travel agency service, photography services, as to whether these are used for personal consumption. If they are used for the activity of the company the appellant would be eligible for credit. However, the appellant is not eligible for refund of credit of out of pocket expenses - For the period post-1.4.2011 also, there is difference in the amount of refund claim as well as the amount of credit disclosed in the ST-3 returns. For these reasons, these appeals also require to be remanded to the adjudicating authority for reconsidering the issue of refund.
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