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2022 (2) TMI 1121 - CESTAT MUMBAIRefund of accumulated CENVAT credit - input services deployed for rendering of service to M/s Rolex SA, Geneva - exports or not - July 2012 to December 2013 - rule 5 of CENVAT Credit Rules, 2004 - N/N. 27/2012-CE(NT) dated 18th June 2012 - HELD THAT:- There are two obligations that devolve on the appellant, viz, promotion and marketing of Rolex watches in India and undertaking repairs/replacement during the warranty period for which neither the customer nor the overseas entity are charged. That the ‘consideration’ in the contract, having nought to do with actual turnover in India or the nature and extent of repairs, is for the contracted activity is plausible; in any case, the manner of computation does not, of itself, deprive the obligated financial flow from acceptability as ‘consideration’ for service - It would appear that, for any ‘post-warranty’ repair/ replacement, which dealers are unable to handle, the undertaking of such work by the appellant entitles them to bill the customer which is ‘taxable service’ rendered in ‘taxable territory’ and not in dispute here. The appellant does render service in ‘taxable territory’ and that due tax is discharged on such transactions is common ground. The lower authorities have not identified the terminal entities that the appellant is purportedly ‘intermediary’ for, the manner in which the ‘intermediary’ service is recompensed in the channelizing of ‘consideration’ from the customer to the supplier or the origin of the supply of service in the course of which the ‘intermediary’ facilitation by the appellant occurs. The adjunct proposition of ‘no service’ to obfuscate this lacuna brings the contradiction to the fore – the determination of ‘intermediary’ is founded upon the obligations in a contract which should not only have been redundant but also not acknowledgeable as contract if the proposition that the compensation terms therein, not being ‘consideration’ in the absence of ‘service’, are an internal arrangement for reimbursement of expenses is also accepted. Logic and legality are obviously invisible in the conclusions of the lower authorities. The nature of the service is irrelevant for the purpose of rule 5. All that is required is compliance with the conditions laid down therein which, inter alia, include undertaking of exports as specified in rule 6A of Service Tax Rules. As pointed out by Learned Counsel, all the conditions therein had been complied with; any counters thereto in the impugned order are, for the reasons supra, without authority of law. Therefore, the denial of the refund is not within the authority of law. The appellant, as provider of ‘service’ outside the ‘taxable territory’ is entitled to be relieved of the tax burden in the value of ‘service’ so exported - there is only passing mention of the entitlement in the event of eligibility; all that can be deduced is that the original authority does not controvert eligibility of ₹ 10,77,183/-. The claim is for a higher amount and the conformity of the remaining portion of the claim to the formulation in rule 5 of CENVAT Credit Rules, 2004 needs the attention of the competent authority. The matter remanded to the original authority for considering the submissions of the appellant for the remaining portion of the claim - appeal allowed by way of remand.
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