Service Tax
TRT-2025-
Cestat Mumbai
Date:-25-11-22
In:-
Issue Favourable to Tax Payer ?:-
Order date – 25 November 2022
Facts –
- The Appellant, M/s. KKR India Advisors Pvt. Ltd. were providing taxable output services viz. banking and other financial services and availing Cenvat Credit of the Service Tax paid on various input services used by them in providing the said output services.
- The appellants filed two refund claims in respect of the accumulated Cenvat Credit on the grounds that the output services provided during the periods in dispute viz. 1.10.2016 to 31.3.2017 & 1.4.2017 to 30.6.2017 respectively had been exported and they were not in a position to utilize the Cenvat credit availed on the said input services.
- The Adjudicating Authority rejected the refund claims in respect of Business Travel Service, Membership of club or Association, Event Management Service and Business Support Services.
- Being aggrieved the appellant had filed an appeal
Issue –
- Whether the authorities below have rightly rejected the refund claims in respect of Business Travel Service, Membership of club or Association, Event Management Service and Business Support Services as ineligible input services in terms of Rule 2(l) of Cenvat Credit Rules, 2004 being no nexus with the output services?
Order –
- The Tribunal observed that it is settled legal position that denial of Cenvat credit can be done only by issuing notice under Rule 14 ibid and the department cannot reject refund of Cenvat credit solely under Rule 5.
- Admittedly since the availment of credit has not been questioned by the department herein by issuing show cause notice in terms of Rule 14 ibid, the refund benefit cannot be denied on the ground of non-establishment of nexus between input and the output services.
- The Tribunal relied on the decision of this Tribunal in the matter of BNP Paribas India Solution Pvt. Ltd. vs. Commr. CGST, Mumbai East; 2022 (58) G.S.T.L. 539 (Tri.- Mumbai) held that while allowing the appeal of the assesse therein allowed the refund claim u/s. 5 ibid by holding that since the provisions of Rule 14 ibid have not been invoked, the refund of Cenvat credit as claimed by the Appellant under Rule 5 ibid cannot be denied.
- The Tribunal on verified the mails and invoices, which have been produced and found that are sufficient to establish the nexus. Hence, it was held that the appellants are entitle for the refund as claimed by them and the authority below is not justified in rejecting the same.
- Accordingly appeal is allowed.
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