1. As per facts on record the appellant is a 100% EOU engaged in the service of Information Technology software enabled services viz., e-publishing of books and are exporting their output service covered under Section 3(iii) of Export of Service Rules, 2005. For providing the above output service, they hade availed input service credit on various services which were stated to be used in rendering the above output services. The appellant had filed a refund claim for Rs. 41,23,046/- under Rule 5 of the Cenvat Credit Rules, 2004 on the ground that the credit involved on the said input services could not be utilized by them as the entire output service was exported. After due process of law, the Department vide the impugned order had sanctioned an amount of refund to the tune of Rs. 35,73,093/- and rejected the balance amount of Rs. 5,49,953/-. The rejected amount pertained to Cenvat credit involved on Renting of Immovable Property, certain invoices pertaining to Management Consultancy, Manpower supply and Information Technology (Software) service, Commercial Training and Coaching, Technical Inspection & Certification and Convention services.
2. On appeal against the above order, the Commissioner (Appeals) allowed some services and rejected others. Hence the present appeal.
3. After hearing both sides duly represented by Shri S. Ramachandran, Consultant, I find that the refund to the extent of Rs. 4.27 lakhs approximately stands rejected by the lower authorities, claimed under the category of renting of immovable property service, on the ground that the service was provided by the Director of the Company in her individual capacity and not in the course of performing the role as the Director of the Company. As such, the appellant was not liable to pay any service tax under reverse charge basis and the availment of such credit of service tax paid is incorrect and consequently not eligible for refund. The authorities below observed that even though the amount paid by the appellant under mistake of law is liable to be refunded, in terms of Section 1B of CEA, 44, but as the appellant had made the claim under Rule 5 of CVR, 2004, the same cannot be entertained.
4. I find that there is no dispute about the fact that service tax stands paid by the appellant in respect of services availed by them from their Director, in her individual capacity, under the category of Renting of Immovable Property service. In such a scenario, the stand of the Revenue that they were under no legal obligation to discharge service tax cannot be appreciated. Had it been paid by the Director in her individual capacity, the same would still be available as a credit to the appellant. Revenue at the time of receipt of service tax from the appellant never objected and accepted such service tax deposited by them. As such, I find that the denial of refund to the assessee, under Rule 5 of CCR, 04 is not justified. In as much as admittedly such service was used by the appellant in relation to their business activity and satisfied the essential requirement of use for rendering output service.
5. A part of the refund stands denied in respect of Information Technology services on the ground that the same were used for preparation of conveyance allowance chart of the employees and not in connection with the output service. As per the appellant they updated and installed new software only for the efficient working and to improve the administrative efficiency. In that process the upgradation of pay roll of the employees is an effort for the better provision of output service. The Boards Circular dated 19.01.2010 was observed that whatever service improves the quality of output service, the same has to be held as availed in connection with the output service. I find no justifiable reason to deny the credit on the said account.
6. Further, an amount of Rs. 35,337/- stands denied in respect of delegate fees paid by the appellant to various service providers for training of their employees. The service tax stand charged by the service providers under the category of Commercial Coaching and Training Services, which are covered by the definition of input service under Rule 2(1) of CCR. The Tribunal in their decision vide Final Order No. 41497 to 41525/16 dated 07.09.2016, for the same appellant has held the said service to be cenvatable input service. By following the same I hold in favour of the assessee. Similarly an amount of Rs. 1,598/- which stands made as delegate fee/registration fee to various organizations for receiving, training and improving the skills of the employees would be eligible for the purpose of Cenvat credit and consequent refund.
7. Refund of credit availed in respect of Management Consultancy Services, as also Manpower Recruitment Services and Technical Inspection and Certification Services stand denied on the ground that the same cannot
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be held to be cenvatable input services. I find that all the said services are connected with the business of the appellant and have to be held as having been used in relation to their business. The same has been subject matter in a number of Tribunal decisions holding that these services have nexus to the business activities. Accordingly, I find no justification for denial of the refund. 8. In view of the foregoing discussions, I set aside the impugned order and allow the appeal with consequential relief to the appellant.