Citation Codes

Equivalent Citations

citation codes

Case Number

Appeal Nos. ST/85693-85694/2015, 85485-85494/2018

Advocates

Shri Abhishek Rastogi, Advocate, ;
Shri M.K. Sarangi, Joint Commissioner (AR),

Judges

Ramesh Nair, Member (Judicial)
C.J. Mathew, Member (Technical)

Acts

Section 67 of the Finance Act, 1994 read with Rule 5 of the Service Tax (Determination of Value) Rules, 2006
Rule 4A of the Service Tax Rules, 1994. Neither Rule 9, nor Rule 4A
Rule 5 of Cenvat Credit Rules, 2004. Reasons
Rule 5 of the Cenvat Credit Rules, 2004
Rule 9 of the CENVAT Credit Rules, 2004
Rule 2(l) of Cenvat Credit Rules, 2004
6 months. Rule 5

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Smart Summary

Structured Summary of the Opinion (Ramesh Nair, Member (Judicial))

Factual and Procedural Background

These appeals challenge Orders-in-Appeal in which the Commissioner (Appeals) upheld rejection of refund claims filed by the appellant under Rule 5 of the Cenvat Credit Rules, 2004. The impugned decisions rejected multiple refund claims for reasons including lack of nexus between input services and output services, alleged non-compliance with Notification No. 27/12-CE(N.T.) dated 18-6-2012 (periodicity and debit entry requirements), rejection of credits claimed on out-of-pocket expenses (OPEs), invoices bearing an address not registered with Service Tax, duplicate rejections (arithmetical errors), incorrect computational formula applied by the adjudicating authority, non-submission of supporting documents, and lack of reasons for certain rejections. The appellant contested those findings through appeal; the revenue reiterated the lower authority's findings. The tribunal considered submissions from the parties, examined the classification/use of services, statutory provisions and notifications cited by parties, and proceeded to remand the matters for fresh adjudication after recording detailed observations.

Legal Issues Presented

Whether the appellant is entitled to refund under Rule 5 of the Cenvat Credit Rules, 2004 despite the discrepancies and rejections recorded by the lower authorities.
Whether the input services claimed as Cenvat credit (various services listed in the record) have the requisite nexus with the appellant's output services so as to qualify as "input service" under Rule 2(l) of the Cenvat Credit Rules, 2004, particularly after the exclusion of "activities relating to business" by Notification No. 3/2011-CE(N.T.).
Whether filing a single claim after six months covering two quarters (April–June and July–September 2012) contravenes Rule 5 or Notification No. 27/12-CE(N.T.), dated 18-06-2012, which the lower authorities treated as requiring quarterly claims only.
Whether debit of the refund amount in the Cenvat account must be shown at the time of filing the refund claim or can be done subsequently before sanction, and whether later debiting (and showing in ST-3 returns) satisfies Notification No. 27/12-CE(N.T.).
Whether Cenvat credit/refund can be denied for invoices representing out-of-pocket expenses (OPEs).
Whether invoices bearing an address not registered with the Service Tax department preclude taking Cenvat credit.
Whether arithmetic errors, duplicate rejections and incorrect application of the formula for refund computation (total Cenvat credit vs. net credit) justify rejection of refunds.
Whether claimed refunds were lawfully rejected for lack of supporting documents and whether the appellant did in fact submit the required documents.
Whether certain specific amounts rejected without reasons in the Orders-in-Original/Orders-in-Appeal require fresh consideration.

Arguments of the Parties

Appellant's Arguments

The services for which Cenvat credit was availed (detailed categories) are used in providing the appellant's output services and therefore qualify as "input service" under Rule 2(l) even after the April 1, 2011 amendment; the services are not covered by the specific exclusions.
The definition of "input service" begins with "any service used by a service provider for providing output service" and should not be narrowly interpreted merely because "activities relating to business" was excluded.
Rule 5 of the Cenvat Credit Rules, 2004 does not specify periodicity; while Notification No. 27/12-CE(N.T.) limits to one claim per quarter, filing a claim covering two quarters together (filed after six months) is not barred provided the overall time limit (one year from the relevant date) is met; the appellant filed claims for April–June and July–September 2012 as one submission and was within time.
Debit entries showing reversal were recorded in ST-3 returns and a revised Cenvat account was submitted after show cause proceedings; it is not mandatory to debit immediately at filing time so long as the debit occurs before sanction (and here it was done).
Out-of-pocket expenses must be included in taxable value under Section 67 of the Finance Act, 1994 read with Rule 5 of the Service Tax (Determination of Value) Rules, 2006; OPEs are part of the gross value of service and cannot be treated differently from main service for Cenvat/refund purposes. The department's cited HCL Technologies decision denied refund only because the underlying service could not be identified; in the appellant's case the OPEs are identifiable (contract with JLL) and therefore eligible.
Rule 9 of the Cenvat Credit Rules, 2004 and Rule 4A of the Service Tax Rules, 1994 prescribe invoice requirements but do not mandate that the address on the invoice must be the assessee's registered address; this was accepted in GE India Exports Pvt. Ltd. and thus mere difference of address (e.g., Nariman Point) is a procedural lapse and not a ground to deny substantive credit.
The adjudicating authority made arithmetic errors and duplicated rejections leading to excess denials of amounts (several specific instances and figures cited); these errors should be corrected.
The correct formula for refund computation (Rule 5 and Notification No. 5/2006-CE(N.T.)) requires applying export turnover proportion to total Cenvat credit availed, not to net credit after domestic utilisation; the appellant relied on a favorable Mumbai Tribunal decision in its own case to support this point.
The appellant submitted supporting documents for amounts challenged as lacking documentation and sought verification rather than outright denial.
Certain rejections (e.g., Rs. 2,27,436 for Oct–Dec 2012) were made without reasons in the orders and require reconsideration.

Revenue's Arguments

The learned Joint Commissioner (A.R.) for the Revenue reiterated the findings recorded in the impugned Orders-in-Original and Orders-in-Appeal (i.e., the various grounds of rejection listed and relied upon by the lower authorities).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
HCL Technologies (case cited by department; no citation provided in text)	Used to support rejection of refund on out-of-pocket expenses where the underlying service could not be identified.	The court noted the HCL Technologies decision was distinguishable because in the present case the appellant produced the contract and showed that OPEs were identifiable and part of the service provided; hence HCL did not justify denial here.
GE India Exports Private Limited [(2016) 71 taxmann]	Authority for the proposition that invoice address not being the assessee's registered address is not a ground to deny Cenvat credit; invoice/address is a procedural matter.	The court relied on this precedent to hold that invoices addressed to a different (Nariman Point) address do not, by themselves, disqualify the claimed Cenvat credit.
M portal India Wireless Solutions P. Ltd. v. C.S.T. [2012 (27) S.T.R. 134 (Kar)]	Holds that where services were received and used by the assessee, credit cannot be denied merely because the premises where service was received was not registered.	The court cited this decision to support the view that credit cannot be denied solely because the invoice is addressed to a premises not registered with Service Tax, provided the service was received and used by the appellant.
Appellant's own Mumbai Tribunal decision [2017-VIL-617-CESTAT-MUM-ST]	Supports the contention that the formula for refund computation should apply export turnover proportion to total Cenvat credit availed during the period (not to net credit after domestic utilisation).	The court noted this Tribunal decision as supporting the appellant's position that the adjudicating authority misapplied the computation formula by deducting domestic utilisation before applying the export-turnover proportion.

Court's Reasoning and Analysis

The court proceeded through a structured factual and legal analysis, addressing each principal ground of rejection raised by the lower authorities and by the Commissioner (Appeals):

Nexus of input services: The tribunal listed the contested services and their specific uses (e.g., event management and photography for business events/advertisement or sales promotion; convention services for conferences/outdoor training; sponsorship for CSR; works contract for commissioning/installation and maintenance; business auxiliary services for actuarial/legal compliance; training; manpower supply; repair services; management consultancy). The court held that the main clause of the Rule 2(l) definition—"any service used by a service provider for providing output service"—was determinative. Even though "activities relating to business" was excluded post-amendment, the listed services were actually used in providing the appellant's output services and therefore fell within the definition of "input service." The tribunal found the lower authorities erred in interpreting the exclusion to categorically deny all such services.
Works contract services: The court distinguished works contract services used for construction of buildings (which are excluded when used that way) from works contract services used for maintenance/repairs. Here the invoices showed maintenance use; therefore the works contract services were not excluded.
Periodicity of refund filing (April–September 2012): The court observed that although the appellant filed a single claim covering two quarters after six months, the notification's restriction aimed to avoid multiple claims in the same quarter; it does not bar filing combined claims for two quarters so long as the overall time limit (refund to be filed within one year from the relevant date) is complied with. The tribunal found no violation and held the claim should not be rejected on that ground.
Debit entry requirement: The court accepted the appellant's evidence that the reversal/debit was reflected in ST-3 returns and that the appellant had debited the Cenvat account after filing but before adjudication. The tribunal reasoned that immediate debiting at filing is not mandatory; the important point is that reversal occur before sanction. The court also noted the adjudicating authority could have directed reversal prior to sanction but, since reversal was made, refund could not be withheld on that account.
Out-of-pocket expenses (OPEs): The court held that OPEs form part of the gross value of service (citing Section 67 read with Rule 5 of the Service Tax (Determination of Value) Rules, 2006 as the statutory basis mentioned by the appellant) and therefore cannot be denied classification as service merely because they are billed separately. The tribunal rejected the lower authorities' categorical denial of Cenvat/refund on the ground that an invoice was for OPEs.
Invoice address not registered: The tribunal found that insofar as the service was received and used by the appellant, an invoice addressed to another premise (e.g., Nariman Point) not registered in the appellant's name was not a valid ground for denial of credit; the court relied on cited authorities (GE India and M portal) to support this treatment of address discrepancies as procedural and not substantive.
Duplicate rejections and arithmetic errors: The court noted multiple instances where the Orders-in-Original repeated invoice entries or duplicated rejections (specific amounts such as Rs. 30,051; Rs. 1,63,329; Rs. 4,06,829; Rs. 43,219; Rs. 1,593; Rs. 2,98,987 were cited). The tribunal characterized these as factual/arithmetic errors that must be verified and corrected by the adjudicating authority.
Incorrect formula applied: The tribunal found the adjudicating authority applied the export-turnover proportion to "net Cenvat credit" (after deducting credit utilized for domestic liability), resulting in a wrongful disallowance (noted as Rs. 94,267 difference). The court stated that the correct approach—supported by Rule 5 and Notification No. 5/2006-CE(N.T.) and by the appellant's Tribunal decision—is to apply the export-turnover proportion to the total Cenvat credit availed during the period; domestic utilisation should not be deducted before applying the proportion.
Non-submission of documents and unexplained rejections: The tribunal recorded that the appellant asserted submission of supporting documents for amounts challenged; the court directed the adjudicating authority to verify the records and decide. For amounts rejected without reasons (e.g., Rs. 2,27,436 for Oct–Dec 2012), the tribunal held such portions require fresh consideration.
Overall remedial approach: Because many of the tribunal's findings were fact-sensitive and required verification of records (correcting arithmetic mistakes, verifying submission of supporting documents, confirming reversals in ST-3 returns), the court declined to decide all issues finally on paper and remanded the matters to the adjudicating authority with detailed observations and directions to pass fresh orders after verifying records and applying the correct legal tests and formulas.

Holding and Implications

Holding: APPEALS ALLOWED BY WAY OF REMAND.

Implications:

The tribunal remanded the appeals to the adjudicating authority for fresh orders that take into account the tribunal's observations: (a) accept eligible services as input services where nexus is shown and where exclusions do not apply; (b) correct arithmetical and duplication errors; (c) permit refund claims filed for two quarters together if overall time limits are met; (d) accept reversal/debit shown in ST-3 and permit refund where reversal has been effected prior to sanction; (e) treat out-of-pocket expenses as part of taxable service value where the underlying service is identifiable; (f) not deny Cenvat credit solely because an invoice is addressed to a non-registered premise; and (g) apply the refund formula to total Cenvat credit availed rather than deducting domestic utilisation beforehand.
The adjudicating authority is directed to verify records, supporting documents and accounting entries, correct arithmetical mistakes, and pass fresh speaking orders consistent with the tribunal's legal conclusions.
The opinion focuses on correcting lower-authority errors and remand for reconsideration; it does not purport to establish a new binding precedent beyond the reasoning applied to the facts and authorities cited. The immediate direct effect is that the appellant's claims must be reconsidered in light of the tribunal's directions; final entitlement to refund is subject to the adjudicating authority's fresh decision in accordance with those directions.

This summary is strictly confined to the material and reasoning contained in the provided opinion and does not include any information not present in that text.

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Ba Continuum India Pvt. Ltd. v. Commissioner Of Service Tax-Ii, Mumbai .

Ramesh Nair, Member (Judicial):— These appeals are directed against Orders-in-Appeal passed by the Commissioner (Appeals) whereby Ld. Commissioner upheld the rejection of the refund claims filed by the appellant under Rule 5 of Cenvat Credit Rules, 2004. Reasons for rejection of refund claims are as under:—

1. Input service on which Cenvat credit was availed and in turn claimed refund, have no nexus with the output service.

2. Refund claim for period April to Sep'12 was filed for six months as against the refund is required to be filed on quarterly basis therefore there was contravention of condition of Notification no. 27/12-CE(N.T.) dated 18-6-2012.

3. The appellant had not shown debit of refund amount in Cenvat account at the time of filing refund claim, thus there was no compliance of Notification No. 27/12-CE(N.T.) dated 18-6-2012.

4. Refund in respect of Cenvat Credit availed against invoices pertains to out of pocket expenses was rejected.

5. Invoice bearing different address which is not registered with Service Tax department.

6. Refund rejected twice in respect of some invoices.

7. There is error in OIA whereby refund of an amount of Rs. 2,98,987/- was erroneously rejected twice in the OIO.

8. Incorrect formula was applied for computation of an amount.

9. Supporting documents not submitted.

10. In respect of an amount of Rs. 2,27,436/- for the period Oct to Dec, 2012 no reason was given for the difference in between amount of refund in appeal before the Commissioner (Appeals) and amount sanctioned but rejected in OIA. Being aggrieved by the orders-in-Appeal appellant filed present appeals.

2. Shri. Abhishek Rastogi, Ld. Counsel for the appellant submits that the department has denied the refund claim in respect of Cenvat credit availed on various inputs service under the category of accommodation, courier, renting of immovable property, works contract, goods transport agency services, general insurance service, club or association services, telecommunication services, business auxiliary services, management and business consultancy series, copyright services, air travel, business support services, convention and photography services, sponsorship, training, banking and other financial service, repairs and maintenance service and event management services. The grounds cited for such disallowance is that the input services are covered under the ambit of “activities relating to business” which was deleted from the definition of “input service” under Rule 2(l) of Cenvat Credit Rules, 2004 vide Notification No. 3/2011-CE(N.T.) dated 1 March 2011 with effect from 1 April, 2011. Accordingly, the OIA held that the disputed services do not have any nexus with the output services of the appellant. The definition of “input service” under Rule 2(l) of Cenvat Credit Rules, 2004 begins with the term “any service used by a service provider for providing output service”. Prior to 1 April, 2011, the definition was wide enough to include all services in relation to the business of the assesee. Post April 2011, specific exclusions were brought in to the definition of “input service” and the “activities related to business” was removed. However this does not mean that the definition of “input service” is to be interpreted in a narrow manner. The services rejected in the OIO and OIA are not covered under any of the exclusions.

3. As regard the issue that the refund was filed six monthly for the period April to September, 2012, he submits that neither Rule 5 of the Cenvat Credit Rules, 2004 nor Notification No. 27/12-CE(N.T.), dated 18 June 2012 mention that refund claim cannot be filed for a period of 6 months. Rule 5 does not specify the periodicity of refund claim and explanation to Rule 5 defines “relevant period as the period for which claim is filed. The Notification No. 27/12-CE(N.T.) dated 18-06-2012, on the other hand in condition (a), specifies that a provider of output service shall submit not more than 1 claim of refund for every quarter. The appellant has filed only one claim for April to June, 2012 and for July to September, 2012. The notification No. 27/2012-CE(N.T.) dated 18-06-2012 does not bar filing of such claim.

4. As regard the allegation that appellant had not shown debit of refund in Cenvat account at the time of filing of refund application. The claim was rejected citing non compliance of Notification No. 27/12-CE(N.T.) he submits that the debit entry was shown in the ST-3 returns filed and revised Cenvat account was submitted pursuant to the show cause notice hearing with the adjudicating authority. As regard the issue whether the Cenvat credit in respect of invoice pertains to out of pocket expenses, he submits that Section 67 of the Finance Act, 1994 read with Rule 5 of the Service Tax (Determination of Value) Rules, 2006 requires the value of OPEs to be included in the taxable value for the purpose of levy of service tax. Hence, invoices for OPEs can be considered to have the same nature as that of the main service rendered. In the HCL Technologies case cited by the department, the Hon'ble Delhi Tribunal has rejected the refund on out-of-pocket expenses because the relevant underlying service could not be identified. In the present instance, the Appellant submits that the out-of-pocket expenses have been paid to JLL on account of various types of support services such as manpower, repairs and maintenance availed from them. A copy of the contract entered into with JLL is enclosed is clearly identifiable in this at page 224 of the paper-book (clause 5). The contract clearly stipulates payment of OPEs incurred by JLL in relation to services rendered by them.

5. Regarding the issue that invoice of Cenvat credit bearing wrong address, he submits that Rule 9 of the CENVAT Credit Rules, 2004 prescribes the documents on the basis of which credit can be availed. Rule 9 specifies that CENVAT credit can be taken on the basis of an invoice issued by the service provider. The requirements of an invoice are mentioned under Rule 4A of the Service Tax Rules, 1994. Neither Rule 9, nor Rule 4A require that the address mentioned on the invoice should be the registered address of the assessee. This position has been upheld in the case of GE India Exports Private Limited [(2016) 71 taxmann]. Additionally, this is merely a procedural lapse and substantive benefits cannot be denied on these grounds. Further, the Commissioner (A) has given the benefit of CENVAT credit on such invoices bearing Nariman Point address in the order number PK/314/ME/2017, dated 30 November 2017 for the period Oct to Dec 2013.

6. The issue regarding arithmetic error in the order-in-original the refund in respect of same invoices were rejected twice therefore refund of an amount of Rs. 30 051/- was rejected in excess, in this regard he submits that during the period Oct to Dec 13, the appellant had challenged the rejection of an amount of Rs. 30,051/- on account of such amount being rejected twice in the OIO. The appellant had clearly mentioned the serial numbers under which such amount was repeated. The Commissioner (Appeals) has dismissed this contention of the Appellant in para 9 of the impugned OIA without providing any cogent grounds for such dismissal. During the period Jan to Mar'14 (010 no. 132-R/G0/2015-16, OIA No. PK/313/ME/2017, appeal no. ST/85489/2018-(DB)), the Appellant had challenged the rejection of an amount of INR 11,766/- on account of such amount being rejected twice in the OIO. The Appellant had clearly mentioned the serial numbers under which such amount was repeated. The Commissioner (Appeals-II) has dismissed this contention of the Appellant in para 9 of the impugned OIA without providing any cogent grounds for such dismissal. During the period Oct to Dec'14 (OM no. 26-R/AC/2016-17, OIA No. PK/211/ME/2017, appeal no. ST/85485/2018-(DB)), the adjudicating authority has rejected the CENVAT credit on invoices issued by M/s. Leadedge Training and Consulting. However, the amount of rejection exceeds the amount of credit availed by INR 43,219/- as pointed out by the Appellant. The adjudicating authority has inadvertently rejected the excess amount of INR 43,219/-. During the period Oct'10 to Mar'11 (OM no. ST-11/Div.V/MU/R-122/13-14/2940, OIA No. 843, appeal no. ST/85693/2015-Mum), the adjudicating authority has made an arithmetic error in computing the rejection amount as pointed out by the Appellant. This has lead to an excess rejection of INR 1,593/-.

7. There is error in OIA inasmuch as an amount of Rs. 2,98,987/- was wrongly rejected twice in OIO. In this regard the Appellant had pointed out this error in the appeal before commissioner (Appeals-II). The Commissioner (Appeals-II) had accepted the contentions made by the Appellant in this regard in para 9 of the OIA. However, the Commissioner (Appeals-II) has not included this amount in the amount sanctioned (INR 61,42,834/-) in para 11 of the OIO. During the period July to September 2013 (OIO no. AC/R-210/Div-V/MU/14-15, OIA no. PK/215/ME/2017, appeal no. ST/85487/2018-(D13)), the Appellant had challenged the rejection of an amount of INR 1,63,329/- on account of such amount being rejected twice in the Oder. The Commissioner (Appeals-II) has accepted this contention in para 9 of the impugned OIA and has reduced this amount from the total amount of rejection. However, this amount was not included in the sanctioned amount in the OIA.

8. During the period April to June 2014 (OIO no. 554-R/CYM/2015-16, OIA no. PK/214/ME/2017, appeal no. ST/85488/2018-(DB)), the Appellant had challenged the rejection of an amount of INR 4,06,829/- on account of such amount being rejected twice in the 010. The Commissioner (Appeals-II) has accepted this contention in para 10 of the impugned OIA and has reduced this amount from the total amount of rejection. However, this amount was not included in the sanctioned amount in the OIA.

9. There is an issue that during the period Oct 10 to March 11 wrong formula was applied by the department. As regard the net Cenvat credit availed and thus there is difference of Rs. 94,267/-. In this regard he submits that Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 5/2006-CE(N.T.) lays down the formula to be applied for computation of the refund claim amount. The formula prescribed in these provisions requires the export turnover proportion to be applied to the total Cenvat credit availed during the period. This position has also been upheld by the Mumbai Tribunal in the appellant's own case [2017-VIL-617-CESTAT-MUM-ST]. The adjudicating authority should have considered “total credit” and not net credit for computing the refund amount.

10. There is allegation for rejection of the claim that appellant have not submitted supporting documents in respect of refund amounting to Rs. 23,749/-. In this regard appellant submits that appellant had submitted requisite supporting documents for this amount alongwith appeals. As regard the rejection of refund claim of Rs. 2,27,436/- for the period Oct to Dec, 12 he submits that order in appeal has not given any ruling on this amount therefore there is no speaking order on this and same was wrongly rejected.

11. On the other hand, Shri. M.K. Sarangi, Ld. Joint Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.

12. We have carefully considered the submissions made by both sides and perused the records.

13. The issue to be addressed by us is that whether the appellant is entitled for the refund claim under Rule 5 despite various discrepancies pointed out by the lower authorities.

14. As regard the issue related to nexus of input service with the output service, we find that services involved are following services with its use as detailed below:

1. Event management services & Photography services - Business events organised for holding business discussions and interactions (Specifically covered under “advertisement or sales promotion”)

2. Convention services - For holding conferences, meetings and outdoor training of employees (Specifically covered under “coaching and training services”)

3. Sponsorship services - For mandatory CSR activities (Specifically covered under “advertisement or sales promotion”)

4. Works Contract services - Commissioning and installation electrical equipment/electronic devices (Services are not used for construction or execution of works contract for building or civil structure or any part thereof or for laying foundation or support structure of capital goods; Specifically covered under “renovation and repair” services)

5. Business Auxiliary Services - Consultant fees for actuarial valuation required under AS 15 and for compliance with labour laws (Specifically covered under “accounting” or “Legal Services”)

6. Training services - Used for employee training programmes (Specifically covered under “coaching and training” services)

7. Manpower supply services - For salary reimbursement of expats from Bank of America, Mauritius (Specifically covered under “recruitment and quality control”)

8. Repair services - Regular servicing and maintenance of office premises (Specifically covered under “renovation or repairs of premises”)

9. Management Consultancy - For consultancy regarding legal compliance and merger with group company (Specifically covered under “legal services”)

Other services are as follows:

1. Courier services

2. Accommodation services

3. Club and association services

4. GTA services

5. Renting of immovable property service

6. Business support service

7. Telecommunication service

8. General Insurance

9. Copyright services

10. Air Travel service.

15. The lower authority mainly contended that the above services are not admissible input service for the reason that in the definition the service related to business activities was excluded. In our view merely due to this reason it cannot be said that all the above services are not input service. To qualify service as input service irrespective whether activities related to business was excluded but as per the main clause of the definition of the service is that any service used for providing out put service is admissible input service. The appellant are exclusively output service provider, to run the entire business for providing output service, all the above services are invariably required therefore all the said services were used for providing output service, accordingly, services are covered under the ambit of input service as defined under 2(l) of Cenvat Credit Rule, 2004.

16. As regard the works contract service though the works contract service was excluded in relation to construction of building of the output service provider, however in the present case works contract service were not used for construction or execution of works contract of building or civil structure or for laying foundation or making structure for support of capital goods but it is used in maintenance related work which is clear from the invoice therefore works contract service is also not excluded in the present case. Accordingly, both the lower authorites have erred in interpreting definition of input service.

17. As regard the issue that the refund for the period April to September, 2012 filed for six months it was observed that appellant though filed refund claim after six month but they have filed though one claim but it is for April to Jun 2012 and July to September, 2012, merely for the reason that no separate claim for two quarters were filed refund cannot be rejected. The restriction under notification provided to avoid multiple claims in particular quarters therefore the claim should be filed quarterly basis but if the claim is filed after six months for two quarters there is no violation of any condition. Only condition which bar the refund is refund should be filed within the overall period of one year from the relevant date. If that be so refund is well within the time limit and same should be allowed.

18. Refund claim was rejected on the ground that appellant for the period April to September, 2012 have not shown debit of refund amount in Cenvat account at the time of filing the refund claim. However appellant have subsequently, debited the said amount in their Cenvat account and debit entry also shown in ST-3 returns. In this circumstances it cannot be said that the appellant have not debited the amount. The purpose of debiting amount is that the said amount is being refunded therefore it is not mandatory that amount should be debited immediately at the time of filing refund. The only obligation on the claimant is that that before sanction of refund if the refund amount is debited in the Cenvat account refund should be granted. In the present case even if the reversal is not made the adjudicating authority could have very well directed to the appellant to first reverse the credit and then refund could have been processed. However, in the present case appellant have admittedly debited the amount in their Cenvat account, refund on this count cannot with withheld, the same should be granted.

19. Regarding the Cenvat credit on the invoice pertains to out of pocket expenses the lower authorities are absolutely wrong on denying refund only for the reason that invoice is in respect of out of pocket expenses. There is no dispute that service provider in relation to service provided, out of pocket expenses which was taken as reimbursement from the appellant. Out of pocket expenses is nothing but part of the gross value of the service provided by service provider therefore there is no difference between the service tax paid on the service bills and out of pocket expenses claimed in separate bill, both are in the nature of service charges and liable to service tax therefore merely because term out of pocket expenses, cenvat credit and consequently refund cannot be denied.

20. As regard the issue that invoice bearing wrong address of Nariman Point which belongs to the appellant but same was not registered, we find that so long invoices are in respect of service which was received and used by the appellant, even though the invoices are addressed to their other premises which is not registered, Cenvat credit cannot be denied. This issue has been settled in various judgements particularly in case of GE India Exports Private Limited (supra) and in case M portal India Wireless Solutions P. Ltd. v. C.S.T. [2012 (27) S.T.R. 134 (Kar)] wherein court held that even though the premises where the service was received is not registered, credit cannot be denied.

21. It is observed in some of the invoices in the order-in-original, in the list of rejection of refund claim, some invoices were repeated therefore rejection in respect of these invoices was made twice which is an arithmetical error, same needs to be corrected after verifying records.

22. Similar type of error occurred in respect of rejection of refund of Rs. 2,98,987/- for the period April to June, 2013. As per the claim of the appellant this amount was rejected twice in order-in-original this also being matter of fact needs to be verified by the adjudicating authority.

23. As regard the incorrect formula applied by the adjudicating authority, we find that appellant has computed refund claim amount for the period Oct, 10 to March, 11 by applying export turnover percentage on the total cenvat credit availed during the period. The department has applied percentage on the net cenvat credit during this period after deducting amount of credit utilised for domestic liability and accordingly credit sought to be denied, which amount to Rs. 94,267/-. As per the definition of net cenvat credit availed is total cenvat credit availed during the period and if there is any utilisation of credit for domestic clearances, the same need not to be deducted, total cenvat credit for the purpose of formula to be taken. Therefore lower authority is absolutely wrong as they have mis-interpreted the term ‘net Cenvat credit availed’, therefore on this count refund could not have been rejected.

24. As regard the issue of non submission of documents, appellant have submitted documents which the adjudicating authority may verify and decide.

25. It was also pointed out by the appellant that in respect of rejection of refund of Rs. 2,27,436/- for the period Oct to Dec, 2012 OIO and OIA have not given any reason therefore this portion of the refund needs relook and to be decided a fresh.

26. Since our above discussion is subject to verification by the adjudicating authority, we allow the appeals by way of remand to the adjudicating authority for passing a fresh order by considering out observations. Appeals are allowed by way of remand.

Ba Continuum India Pvt. Ltd. v. Commissioner Of Service Tax-Ii, Mumbai .

Structured Summary of the Opinion (Ramesh Nair, Member (Judicial))

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Revenue's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Ba Continuum India Pvt. Ltd. v. Commissioner Of Service Tax-Ii, Mumbai .

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