By TIOL News Service

MUMBAI, APRIL 18, 2018: THE refund claim filed under Rule 5 was rejected on the ground that certain services viz. courier agency services, hotel accommodation, restaurant services, mandap keeper and club or association membership services are not admissible input services in terms of Rule 2(l) of CCR, 2004.

In appeal before the CESTAT, the appellant submits that no show cause notice was issued for denial of the cenvat credit on these services and, therefore, at the stage of refund, without following the process of adjudication on the issue of admissibility of input service, is not proper.

Moreover, all the alleged inadmissible Input services have been held to be admissible in the following cases –

+ Qualcomm India Pvt. Ltd. -   2016-TIOL-546-CESTAT-MUM.

+ Ranchi Club Ltd. -  2012-TIOL-1031-HC-JHARKHAND-ST.

+ One Advertising & Communication Services Ltd. -  2012-TIOL-969-CESTAT-AHM.

+ Maruti Suzuki India Ltd.  -  2016-TIOL-3221-HC-P&H-CX.

+ Dr. Reddy's Laboratories Ltd. -  2017-TIOL-981-CESTAT-HYD.

The AR reiterated the findings of the impugned order.

After considering the submissions, the Bench observed –

++ The act of the adjudicating authority is totally illegal and arbitrary for the reason that the appellant has availed the cenvat credit and in respect of which they filed the refund claim. If at all the adjudicating authority is of the view that certain input service is not admissible for the purpose of cenvat credit, he should have issued a separate show cause notice and after carrying out the process of adjudication, order should have been passed holding that whether the said input services are admissible input services or not. Thereafter a decision on refund should have been taken. However, without carrying out the process of adjudication, he straightaway rejected the refund claim, which is not legal and proper.

++ Further, on going through the nature of the service, I find that all these services in question are directly used by the service provider i.e. the appellant...Hence the cenvat credit is admissible.

The appeals were allowed.

(See 2018-TIOL-1229-CESTAT-MUM)