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Refund of CENVAT Credit –Tribunal allowed refund of CENVAT Credit in respect of various services received by the Appellant in the light of definition of ‘input service’ amended w.e.f. 01.04.2011 – Rent paid for ‘fit out’ was held as part of the renting of immovable property service applying principles of bundled services contained in section 66F.
Facts:
The Appellant a 100% EOU and provider of information technology and software service filed refund application under Rule 5 of Cenvat Credit Rules, 2004 r/w Notification No.5/2006 CE(NT) dated 14-03-2006 for the period October, 2011 to December, 2011 in respect of various input services. Department denied the refund claimed relying upon decision of Maruti Suzuki Ltd. v. CCE [2009] 22 STT 54 (SC) observing that appellant has failed to establish that the input service has direct nexus with output services provided by appellant. The Appellant submitted that all the services in respect of which refund claim is denied are very much essential for providing the output services. It was also submitted that the view taken in the said case was doubted and referred to larger Bench of Supreme court in Ramala Sahkari Chini Mills Ltd. v. CCE [Civil Appeal No. 3976/2007, dated 19-2-2016] and further that the said decision dealt with interpretation of inputs and not input services, and therefore not applicable.
Held:
Hon’ble Tribunal allowed refund claim in respect of each of the services by holding as under:
Air Travel Agent: These services were used for booking air ticket for the employees to travel abroad to attend seminar and other meetings. Tribunal noted that, the invoices are accompanied by other documents (e-mail communications) which evidence that the employee has travelled to attend seminar.
Club or Association Services – Services is in respect of the membership fee paid to the Chamber of Commerce. Services were availed for augmenting business and it is the organization which acquires the membership in such associations. It is not for personal consumption or use of employee and therefore is not excluded.
Renting of ‘fit-out’ – The original Authority had partly allowed the credit on renting and disallowed credit on fit out. However considering the components of rent, maintenance and fit out as part of the same agreement for rent, it was considered naturally bundled and full credit was allowed.
Other than the above services, credit in respect of banking and financial services, support services for Xeroxing documents CA service, courier service, custom house agents service, IT Software and Telecommunication service, manpower recruitment service, management and business consultant, commercial coaching and training service also has been allowed fully considering them essential for providing output services.
[Note: Readers may note that decision is important in view of the fact that it takes a view on eligibility of various input services in the light of amended definition of input services w.e.f.01.04.2011.]
