By TIOL News Service

NEW DELHI, OCT 06, 2015: THE appellants are having centralized service tax registration and are engaged in providing services such as Business Auxiliary services, Information technology services, Management consultancy etc and are primarily engaged in exporting their services. The appellants filed refund claim of service tax paid on various input services used for providing output services pertaining to the period October, 2010 to December, 2010 under Rule 5 of CCR, 2004 read with Notification No. 5/2006-CE (NT) dated 14.03.2006.

The Adjudicating Authority allowed the refund claim in part. For the rejected portion, the appellant went in appeal and the Commissioner (Appeals) allowed refund for some services but upheld rejection of part of refund claim on the ground that invoices do not have complete address, invoice not having PAN based registration number, and service is not eligible as input service to claim credit.

He also directed the primary authority to recalculate the total admissible credit before sanctioning any refund.

The assessee is in appeal against this portion of the order too. Inasmuch as it is their contention that there is no need for once again ascertaining the quantum of unutilized CENVAT credit.

The Bench agreed to this submission and observed -

"There is no allegation raised in the show cause notice as to the total amount available as unutilized credit in the account of the appellants. In such circumstances, it was not proper for the Commissioner (appeals) to direct to check and verify or recompute the total credit available as unutilized credit. It would result in waste of time and a futile exercise as accounts were already subject to audit and as there is no such allegation raised in the show cause notice. Therefore, this direction in the impugned order is set aside."

To the other grounds on which the refund was denied, the Bench after considering the submissions held -

++ The department has no case that in inquiry they found that these transactions are not genuine or that tax was not paid. The appellants have produced the Chartered Account Certificate also. In any case, these are all procedural lapses and in a catena of judgments it has been settled that credit cannot be denied on procedural lapses. In Imagination Technologies India (P) Ltd. Vs. CCE Pune-III - 2011-TIOL-719-CESTAT-MUM the CESTAT has held that though the registration number of the input service provider is not stated in the invoice, the credit cannot be denied. For the above reasons, I am of the view that the denial of credit on the ground of incomplete address and invoices not containing PAN based registration number is unjustified. I hold that appellant is eligible for credit on these invoices.

In the matter of denial of credit on Rent-a-cab services, courier services, guest house services, Power Audit Services, Finite Element Analysis (FEA) services, maintenance of Gym Equipment Services, Medical Services, Renting of Speakers, Mike etc, Hotel expenses & Banquet Charges, Conference charges, cleaning services with outside catering and professional services on the ground that these services did not qualify as input services under Rule 2 (l) of CCR, 2004, the Bench held thus -

++ The definition of input service, as it stood during the relevant period was very wide as words 'activities relating to business' was contained in the inclusive part of the definition. The leading judgments in   Coca Cola India (P) Ltd. Vs. CCE Pune III - 2009-TIOL-449-HC-MUM-ST and   CCE, Nagpur Vs. Ultratech Cement Ltd. - 2010-TIOL-745-HC-MUM-ST have settled the interpretational issues in this regard. The series of judicial pronouncements that followed has held that during the relevant period (prior to 1.4.2011) the impugned services are eligible for credit as input services, if the services are relating to the business of the assessee. The activities in relation to business can cover all activities relating to functioning of a business. Thus, any service used by a provider of taxable service which is commercially required for the purpose of carrying on the business of output service provided will be covered by the expression "activities relating to business". Applying the ratio laid in the above judgments I am of the view that appellants are eligible for refund of credit in regard to all the impugned input services.

However, the CENVAT credit availedon Medical services (Rs. 9270) was denied on the ground that the same being in the nature of personal consumption cannot be said to be related to business activity of the appellant.

The appeal was allowed in part accordingly.

(See 2015-TIOL-2123-CESTAT-DEL)