By TIOL News Service

MUMBAI, OCT 16, 2017: THIS is a Revenue appeal against the common order of Commissioner (Appeals) allowing the appeals of the respondent and sanctioning refund under Rule 5 of CCR, 2004.

The respondent is registered with the service tax Department under the category of Consulting Engineering Services and exports its services. The appellant also avails CENVAT credit of the input services received in the course of providing the output service. The appellant filed refund claims for the period July 2006 to December 2007 under rule 5 of CCR, 2004 read with Notification No. 5/2006-CE-NT.

A sum of Rs.1,56,73,674/- was allowed as refund and the balance amount of Rs.36,53,226/- was rejected. Similarly, for the period January 2008 to December 2008, an amount of Rs.2,63,94,460/- was sanctioned and the balance amount of Rs.34,46,885/- was rejected.

The rejection of the claim is due to denial of CENVAT credit on the following - services availed of air-travel, manpower recruitment, Courier, Chartered accountant and Rent-a-Car etc. And, also the credit availed of service tax paid under the category of Management Consultant service on reverse charge basis in respect of remuneration paid to Mr. Pooran Tripathi (the employee and director of Stone And Webster's Inc. deputed in USA) for providing services to the respondent company.

The Commissioner (Appeals) allowed the appeals allowing the CENVAT credit in full and holding the same as refundable.

Revenue is, therefore, before the CESTAT.

After considering the submissions made by both sides, supported by case laws, the Member observed -

"8. …I find that so far the first issue is concerned, as to whether or not the services in question qualify as input services for the business of the respondent assessee in terms of rule 2(l) of the CCR 2004, I have already observed that some of the services in question are already specified in rule 2(l), and I find that each of the service is required by the respondent assessee in providing its output service. The disallowance of input credit in part is also bad and without jurisdiction in absence of notice under Rule 14 of CCR, 2004. As regards the next issue with respect to remuneration paid to Mr. Pooran Tripathi, I find that the very essential fact is absent in the findings of the Adjudicating Authority wherein the facts stated by the assessee that the said person is not its employee, have not been found to be untrue. As such I hold that the learned Commissioner (Appeals) rightly allowed the Cenvat credit in respect of the remuneration paid to Mr. Tripathi."

The Order-in-Appeal was upheld and the Revenue appeals were dismissed.

(See 2017-TIOL-3708-CESTAT-MUM)