By TIOLNews Service

MUMBAI, OCT 04, 2017: REVENUE is in appeal before the Bombay High Court.

The Respondent is a service provider and most of the services are exported. Refund was sought in respect of the input service credit lying unutilized in the account. The Adjudicating Authority allowed the refund claim of Rs.1,78,00,007/- and rejected the claim of refund to the extent of Rs.44,80,757/-.

This rejection was on the ground that the said services did not have any nexus with the output service of Business Auxiliary Service exported by the Respondent.

The Commissioner (Appeals) allowed the refund claim to the tune of Rs.1,92,308/- and rejected the rest of the refund claim of Rs.42,88,429/-.

By order dated 13th January 2014, the CESTAT allowed the Appeal of the Respondent.

As mentioned, Revenue is aggrieved.

After considering the arguments advanced by both sides, the High Court observed that the issue is no longer res integra inasmuch as the same is covered by the decision in Commissioner of C.Ex. Nagpur Vs Ultratech Cement Ltd. =  2010-TIOL-745-HC-MUM-ST .

Paragraph 27 of the said order was extracted wherein it was held that the cost of any input service that forms a part of the cost of the final product, then Credit of Service Tax paid on such input services would be allowable.

The High Court, therefore, concluded -

"…We are of the view that the Appellate Tribunal has correctly followed the said decision of this Court in Ultratech Cement (Supra) and held that the input services have been availed of by the Respondent herein in the course of its business of providing outward services and hence, the Respondent is entitled to refund claim of CENVAT Credit lying in its account due to export of service…."

The Revenue appeal was dismissed.

(See 2017-TIOL-2072-HC-MUM-ST)