M/s. McKinsey Global Services India Pvt. Ltd. Versus Commissioner of GST & Central Excise Chennai
Service Tax
2019 (2) TMI 595 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 7-2-2019
Appeal Nos. ST/42370 & 42371/2018 – Final Order Nos. 40249-40250/2019
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial)
Shri Harish Bindhumadhavan, Advocate for the Appellant
Shri M. Jagan Babu, AC (AR) for the Respondent
ORDER
Brief facts are that the appellants, who were formerly known as 'Visual Graphics Computing services India Pvt. Ltd., filed refund claims for the period April to June 2016 and July to September 2016. After due process of law, the original authority denied the credit as well as the refund in respect of accommodation services and air travel agency service. The appellant approached the Commissioner (Appeals) against the said order who upheld the rejection of refund in respect of these services. Aggrieved, the appellants are now before the Tribunal.
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opined by the authorities below that the services do not contribute or add value to the output services provided by the appellant. He relied upon the decision of the Tribunal in K Line Ship Management (India) Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai – 2017-TIOL-2406-CESTAT-MUM to argue that the department cannot reject the refund claim by stating that the credit is not eligible. In fact, in the present case, the department had not issued any show cause notice alleging that the credit is not eligible to the appellant. In such case, as per Rule 5, the department has to process the refund claim and cannot go into the admissibility of the credit. He also relied upon the decision in the case of Harsco India Services Pvt. Ltd. Vs. Commissioner of Central Excise, Hyderabad – 2017-TIOL-528-CESTAT-HYD to argue that after the amendment, it is not necessary to establish the nexus that the input services were used for providing output services and also relied upon the Board circular DOF
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n no show cause notice issued by the department alleging that the appellants are not eligible for credit of these services. When the department has not raised any allegation by issuing show cause notice that the appellant is not eligible for credit, they cannot go into the admissibility of the credit during the process of refund claim. Further, as per amended provisions of Rule 5, it is not necessary to establish the nexus with the output service. The Board circular clarifies the same. The Tribunal in the case of Kline Ship Management (India) P. Ltd. (supra) has made the following observations:-
“Rule 14. Recovery of CENVAT Credit wrongly taken or erroneously refunded.-
Where the CENVAT credit has been taken wrongly but not utilised, the same shall be recovered from the manufacturer or the provider of output service, as the case may be, and the provisions of section 11A of the Excise Act or section 73 of the Finance Act, 1994 (32 of 1994), as the case may be, shall apply mutatis mut
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and input services used in providing out put services payment of service tax, subject to conditions and limitations set out in Notification no.5/2006. In these circumstances, the only test of admissibility of refund can be the Rule 5 and notification issued there under. I find that the impugned order instead of dealing with this rule and notification issued there under, deals with the admissibility of credit itself. It is seen that for examining the admissibility of credit a separate procedure have been provided under Rule 14 of the Cenvat Credit Rules. It is not open to Revenue to examine the admissibility of Cenvat Credit while adjudicating the admissibility of refund under Rule 5 read with Notification issued there under”.
In the appellant's own case also, the said issue has been held in favour of them.
7. Following the same as well as appreciating the facts, I am of the view that the rejection of refund claim is without any basis and unjustified. The impugned order rejecting the
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