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2014 (5) TMI 616 - AT - Service TaxCENVAT Credit - Business Auxiliary Services - notification no.8/2003-CE dated 20.06.2003 - whether the appellant would be eligible for cenvat credit availed by them in respect of various input service used in or in relation to the providing of Call Centre Service and BPO service which had been exported - Held that:- From a perusal of the Rule 5, it will be seen that this rule is applicable when any input or input service has been used in providing output service which is exported. The term ‘output service’ as defined in Rule 2(p) of the Cenvat Credit Rules, 2005 during the period of dispute, means any taxable service provided by the provider of taxable service to a customer, client, subscriber, policy holder or any other person, as the case may be, and the expression ‘provider’ and ‘provided’ shall be construed accordingly. In terms of explanation to Rule 2 (p), if a person liable for paying service tax does not provide any taxable service or does not manufacture final products, the service tax for which he is liable to pay service tax shall be deemed to be the output service. Thus, in terms of definition of ‘output service’ in Rule 2 (p) of the Cenvat Credit Rules, 2004, the ‘output service’ has to be a ‘taxable service’. A ‘taxable service’ is the one in respect of which, in terms of the provisions of Section 66 of the Finance Act, 1994, the tax at the prescribed rate is required to be paid and these services are those services which are specified in various clauses of Section 65(105). A service which is not specified in any of the clauses of Section 65(105) of the Finance Act, 1994, could not be treated as a ‘taxable service’ during the period of dispute. Since BPO service which was provided by the appellant to their offshore client and which involved transaction processing and the processing of mediclaims, etc. was not a taxable service during the period of dispute and it became taxable as ‘Support Service for business of Commerce’ w.e.f. 1.5.2006 under Section 65(105)(zzzq) read with Section 65(104) (c) ibid, during the period of dispute, this service would not be covered by the provisions of Rule 5 of the Cenvat Credit Rules, 2004 and accordingly, the cenvat credit would not be available in respect of inputs or input services used in or in relation to providing of this service, whether for offshore clients or for domestic clients. Therefore, the appellant were not entitled for cenvat credit of service tax paid on input services used in or in relation to providing of the BPO service during the period of dispute, even if the same had been exported. When the department accepts that the appellant under their letter dated 9.3.2007 had submitted the required information about export of service and availment of cenvat credit in respect of the input service during the period of dispute, they cannot be accused of having suppressed this information from the department with intent to evade service tax by wrongly availing the cenvat credit. The ST-3 returns filed by an assessee are, after all, required to be scrutinized by the concerned range officers/Asstt. Commissioner - longer limitation period would not be applicable to the department and as such, the entire demand for wrongly availed cenvat credit would be time barred - Decided in favour of assessee.
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