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Judgment
These appeals are filed by the assessee against the denial of partial refund that came to be upheld in the impugned Orders-in-Original No.413-420/2020 dt. 04/11/2020 and No.481-483/2020 dt. 18/12/2020. The common issue in all these appeals relates to the denial of cenvat credit on (i) Works Contract Service and (ii) Sponsorship Service, and, based on the common pleadings of the representatives, the appeals are clubbed together for common disposal for convenience.
Heard Shri T.R. Venkateswaran, learned Chartered Accountant for the appellant and Smt. C.V. Savitha, Superintendent, learned AR for the Revenue. I have considered the rival contentions and gone through the documents as well as case laws relied upon during the course of argument.
The denial of the cenvat credit on works contract service was made on the ground that the cenvat credit claimed related to the service tax paid on construction of commercial buildings and civil works that are specifically excluded in the definition of input services as defined under Rule 2(l) of the CENVAT Credit Rules, 2004. Learned Chartered Accountant submits that the appellant company undertook the work of renovation/modernisation and that no new construction of commercial building was ever made. He also drew my attention to the invoices raised in this regard. I find that the work undertook by the appellant was only in the nature of modernisation/renovation/repairs by which no new structure or complex has come into existence and accordingly, the denial cannot sustain.
The denial of cenvat credit on the sponsorship services is made alleging that the cenvat credit availed on this input service had no nexus with the output service exported and this finding has been upheld in the impugned Orders-in-Appeal. Learned Chartered Accountant draws my attention to an earlier order of this Bench in the case of Samsung R&D Institute India Bangalore Pvt. Ltd. Vs. CCT, Bengaluru East [2021(3) TMI - CESTAT Bangalore] wherein a reference is drawn to the letter of the CBEC dt. 16/03/2012 that has done away with the nexus test and hence denial for want of nexus cannot sustain. Moreover, it has also been held in the above order that the Department having not questioned the cenvat credit availed by the appellant at the initial stage, the same could not be questioned when the claim for refund was made. In view of the above, I am of the clear view that the denial of cenvat credit on sponsorship services cannot sustain.
Learned AR submits that insofar as appeal Nos.20195 and 20196/2021 are concerned, the adjudicating authority has recorded that as regards sponsorship services is concerned, the appellant company had not submitted challan copies. The adjudicating authority has recorded that in the absence of input invoice, the exact nature of service could not be determined and hence he has held that the same was not an essential input service.
While the ratio laid down in the case of Samsung R&D Institute India Bangalore Pvt. Ltd. (supra) squarely applies here also, however I deem it proper to remit this issue in these two appeals to the file of adjudicating authority before whom the appellant shall furnish the challan copies for the satisfaction of the Officer and upon being satisfied, the adjudicating authority shall thereafter follow the above ratio without insisting for nexus and issue the refund.
In view of the above, appeals ST/20107 to 20112/2021 are allowed and appeals ST/20195-20196/2021 are allowed by way of remand for limited purpose and with clear directions. The appellant has also claimed consequential interest under Section 11BB of the Central Excise Act. It is seen that the interest under the above Section is automatic which only depends on the granting of refund. In view of the above, the appellant would be entitled the interest under Section 11BB also.
(Order pronounced in the Open Court on 28/10/2021)