The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the nexus aspect cannot be questioned while dealing with the refund application filed under rule 5 of the CENVAT Credit Rules (CCR), 2004. Western Union Services India Pvt. Ltd, the appellant assessee engaged in providing the output services, under the taxable category of ‘management or business consultant service’, ‘business support service’, and ‘information technology software service’ defined under clauses (r), (zzzq) and (ze) of Section 65(105) of the Finance Act, 1994. The assessee appealed against the order passed by the adjudicating authority for the denial of the benefit for an amount of Rs. 41,93,540/because for the period January 2014 to March 2014.
Rajan Mishra and Suryakant Singh, the counsel for the assessee contended that the impugned order upholding rejection of refund applications on the ground of non-establishment of nexus cannot stand for judicial scrutiny. Piyush Bade, the counsel for the department relied on the decisions made by the lower authorities and contended that the services cannot be considered as ‘input service’ defined under Rule 2(l) of the CCR and that there was no nexus between the input services and output services.
The Bench observed that since, availing of CENVAT credit by the assessee was not under dispute, claiming of refund of such credit on account of the exportation of output services cannot be questioned since Rule 5 of CCR, nowhere specifies for the establishment of nexus or otherwise for sanction of the refund benefit. The two-member bench comprising S K Mohanty (Judicial) and M M Parthiban (Technical) held that the nexus aspect cannot be questioned while dealing with the refund applications filed under Rule 5 of CCR.