CESTAT, MUMBAI BENCH
Kijiji (India) (P.) Ltd.
Commissioner of Central Excise
ORDER NO. A/258/2012/SMB/C-IV
APPEAL NO. ST/586 OF 2012
SEPTEMBER 6, 2012
1. The appeal is directed against Order-in-Appeal no. YDB/36/2012 dated 30.04.2012 passed by the Commissioner of Central Excise (Appeals), Mumbai.
2. The facts of the case are as follows.
3. The appellant M/s Kijiji (India) Pvt. Ltd. (now Quikr India Pvt. Ltd.) are engaged in providing Business Auxiliary Services to their customers. Their customers are located in abroad. For rendering aforesaid services, they used various input services such as legal services, market data, payroll processing, customers support activities etc. The appellant filed a refund claim for the service tax paid on input services under Rule 5 of CENVAT Credit Rules, 2004, on the ground that they are unable to utilize the credit inasmuch as all their output services are exported. The same was examined and rejected by the adjudicating authority on two grounds namely (i) there is no nexus between input services and output services and (ii) they have not submitted the invoices for the service tax paid on input services. The appellant preferred an appeal before the lower appellate authority who held that the appellant has submitted invoices in majority of the cases in respect of the input services on which they have claimed refund. However, the Commissioner (Appeals) rejected the refund claim only on the ground that there is no direct nexus between input services received and output service rendered, hence the appellant is in appeal before me.
4. The learned Counsel for the appellant raises the following submissions –
4.1 The input service on which they availed the credit are office utilities, infrastructure support service for running office, Chartered Accountant Service for account advisory/conducting tax audit, pay roll processing service for wages and salaries of their employees, management consultancy services for computation of advance tax liability for running the business, insurance auxiliary service for payment of gratuity to the employees, advertisement service in respect of activities undertaken by the appellant and professional services utilized for facilitate agreement with the clients and so on. All these services have direct nexus and are integrally connected with the output service undertaken by them namely ‘Business Auxiliary Service’ for the foreign customers and accordingly they are entitled for the credit. Inasmuch as their entire output service is exported, they are unable to utilize the credit, and therefore, they have filed the refund claim under Rule 5 of the CENVAT Credit Rules, 2004 in respect of input services which have been used in relation to rendering of the output service. She also relies on the decision of this Tribunal in the case of CST v. Convergys India (P.) Ltd.  21 STT 67 (New Delhi – CESTAT) wherein it has been held that when cost of goods and services becomes part of cost of final product or output services, such goods and services are understood in common parlance as input or input services in relation to final product/output service as defined in Rule 2(k) and 2(l) of CENVAT Credit Rules, 2004 and when services are exported, the appellants are rightly eligible for refund of the credit of duty taken under CENVAT Credit Rules, 2004.
5. The learned A.R appearing for the Revenue reiterates the findings of the lower authorities.
6. I have carefully considered the rival submissions.
6.1 From the perusal of the input services received by the appellant and the nature of the services received, it is evident that all the services are essential in running the business of rendering the output service ‘Business Auxiliary Service’ which is exported. If that be so, all the services come within the purview of Rule 2(l) of CENVAT Credit Rules, 2004 which defines the input service. This Tribunal in the case of Convergys India (P.) Ltd. cited supra held that when cost of goods and services becomes part of cost of final product or output services, such goods and services should be treated as input or input services for the purposes of CENVAT Credit Rules, 2004. The hon’ble High Court of Bombay in the case of CCE v. Ultratech Cement Ltd.  29 STT 244 held that any service which has nexus with the business activity of the appellant, whether it is manufacturing or rendering service, has to be treated as “input service” coming within the purview of Rule 2(l) of the CENVAT Credit Rules, 2004. The ratio of these decisions squarely applies to the facts of the present case. Accordingly, I am of the view that the appellant is rightly entitled for the refund of the service tax paid on input services which have been used in the rendering of output services has been exported.
7. Accordingly, I allow the appeal with consequential relief, if any.