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TMI ID= 327199
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  • Cases Cited

2016 (5) TMI 180 - CESTAT CHENNAI

J-Ray McDermott Engineering Services Private Ltd. Versus Commissioner of Service Tax, Chennai

Refund claim - Rejected on ground of (a) invoices on which credit has been availed and refund claim pertaining to unregistered premises, (b) inputs invoice on which refund claimed does not pertain to the claim period and (c) ineligible input services - export of services - Cenvat credit in respect of unutilized input credit was accumulated in the record of the assessee and when refund thereof was claimed, the said was disallowed by the adjudicating authority.

Held that:- there is no dispute that export of goods and services are not taxable and registration is not a criteria to allow refund when the output service is not liable to duty or tax. By following the decision of Hon'ble Karnataka High Court in the case of mPortal India Wireless Solutions P. Ltd. Vs CST Bangalore [2011 (9) TMI 450 - KARNATAKA HIGH COURT], limitation under Section 11B does not apply to refund of accumulated cenvat credit and therefore bar of limitation cannot be a ground to reject refund of cenvat credit to the assessee. Therefore, the appeal is allowed in so far as the aspect of additional premises is concerned.

The submissions of both the sides, are at factual variance in as much as the appellant had contended that they had shifted their business premises to a new address and the respondent revenue contends that they had registered with the department only on 25-05-2010. The above stated judgment is wide enough to cover both the situations and therefore, whatever is the factual situation, that would not in any way alter the eligibility for refund. The pre-registration issue settled in favour of the appellant. Regarding the third issue of ineligible input services, it is found that the services have been received in respect of Customs Clearing Services received for the goods imported relating to their business and therefore qualify as an eligible input service for the purpose of availment of credit as the said services are for inward transportation of inputs. Therefore, the impugned order is set aside. - Decide in favour of appellant

No.- Appeal Nos.ST/41606 to 41608/2015

Order No.- Final Order No.40703-40705/2016

Dated.- April 7, 2016

Citations:

  1. M/s. Maruti Suzuki Ltd. Versus Commissioner of Central Excise, Delhi-III - 2009 (8) TMI 14 - SUPREME COURT

  2. mPortal India Wireless Solutions (P.) Ltd. Versus Commissioner of Service Tax - 2011 (9) TMI 450 - KARNATAKA HIGH COURT

  3. CCE, Nagpur Versus Ultratech Cement Ltd., - 2010 (10) TMI 13 - BOMBAY HIGH COURT

  4. M/s. Coca Cola India Pvt. Ltd. Versus The Commissioner of Central Excise, Pune-III - 2009 (8) TMI 50 - BOMBAY HIGH COURT

  5. COMMISSIONER OF SERVICE TAX, CHENNAI Versus M/s. REED ELSEVIER PVT. LTD. - 2015 (8) TMI 1276 - CESTAT CHENNAI

  6. M/s Clearpoint Learning Systems (India) Pvt. Ltd. Versus Commissioner of Central Excise, Pune-III - 2015 (6) TMI 749 - CESTAT MUMBAI

  7. Vandana Global Ltd. Versus CCE - 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)

SHRI P.K. CHOUDHARY, JUDICIAL MEMBER

For the Appellant : Shri S.Vinod, Consultant

For the Respondent : Shri R. Chandrasekaran, AC (AR)

ORDER

All the three appeals are taken up together for disposal as they arise out of a common impugned order-in-appeal.

2. The appellant herein are the service provider registered with Software Technology Park of India (STPI) and provides its own and related services to overseas entities. The appellant is registered with service tax department and they are operating from two premises. They are also engaged in providing engineering services like process, piping layout, electrical, instrumentation, mechanical, structural and safety for projects in the offshore oil and gas business and the entire quantum of services rendered to clients situated outside India. The services provided by the appellant qualifies as 'export' in terms of Export of Service Rules, 2005. The service tax paid on input services used for providing export services remain unutilized as services are allowed to be exported without payment of tax. The refund claims were filed under Rule 5 of CCR 2004. The adjudicating authority while passing the OIO have rejected the some of the refund claims on account of (a) invoices on which credit has been availed and refund claim pertaining to unregistered premises (b) inputs invoice on which refund claimed does not pertain to the claim period and (c) ineligible input services. On appeal, the learned Commissioner (Appeals) rejected the appeals. Hence the present appeals.

3. Shri S. Vinodh, Consultant appearing on behalf of the appellant-company submits that they are registered with the service tax department right from 30.1.2008. Thereafter, they shifted their business premises to new address and the amendment was effected to by the service tax department only on 25.5.2010 and argues that since the appellant is already registered with the service tax department and has been complying with the statutory requirements by filing the periodical returns and disclosing all the transactions, the allegation of the department is not valid. He mentions that Rule 5 of the CCR 2004 does not impose any such condition as observed by the lower authorities. In support of his contention, he relied on the judgement of Hon'ble High Court of Karnataka in mPortal Wireless Solutions Pvt. Ltd. Vs CST, Bangalore - 2012 (27) STR 134 (Kar.) which has been followed by this Tribunal vide Final Order No.41175/2015 dt. 24.8.2015 in the case pertaining to CST Vs Reed Elsevier Pvt. Ltd.; that the provisions of Section 11B are only applicable in the case of refund of duties which have not been paid and does not relate to refund of accumulated unutilized cenvat credit. In support of his submission, he relied on the decision of the Tribunal in the case of Clearpoint Learning Systems (I) Pvt. Ltd. Vs CCE Pune - 2015 (37) STR 149 (Tri.-Mum.).

4. On the issue of ineligible input service, he submits that the learned Commissioner (Appeals) has observed that the input services in relation to Customs Clearing Services is not directly used for providing output service, and therefore, it does not qualify as an eligible input. In this regard, he drew my attention to para 8.6 of the OIA. He submits that ld. Commissioner (Appeals) relied on judicial decisions which are mainly in the context of the manufacture and it is not the case of the appellant. He vehemently objects to the findings of the learned Commissioner (Appeals) and reiterates that the impugned services received would qualify as input service and these services used for providing of output service are eligible input service. In support of this submission, he reiterated the definition of "input service as it stood during the period under dispute which had a wide connotation and also included "activities relating to business" and in support of his contention, he relied on the judgement of the Hon'ble Bombay High Court in the case of Coca Cola India Pvt. Ltd. Vs CCE Pune - 2009 (15) STR 657 (Bom.) and CCE Nagpur Vs Ultratech Cement Ltd. - 2010 (20) STR 577.

5. Shri R. Chandrasekaran, A.C. (A.R) appearing on behalf of Revenue reiterated the findings of the OIA and submitted that provider of output service is required to get himself registered under the provisions of service tax and accordingly paid cenvat credit whereas the appellant's premises at Kandanchavady, Perungudi, Chennai-96 was registered with the department only on 25.5.2010. Accordingly, they are not eligible to take cenvat credit as per Rule 3 of the CCR and the Notification No.5/2006-CE (NT) dt. 23.2.2006.

5.1. Ld. A.R submits that the "relevant date" under Section 11B (5) has been stipulated and in an unexplained situation, it would be covered by omnibus/residual clause (f) which states that in any other case, the 'relevant date' is the date of payment of duty. He submits that by applying the said section, the claim is hit by limitation. Ld. A.R relied on the findings of Commissioner (appeals) and also relied on the judicial decisions which have been discussed in the OIA at para 7.1.

5.2 Regarding the issue of ineligible input service, he relied on the Hon'ble Supreme Court decision of Maruti Suzuki Ltd. Vs CCE Delhi -2009 (240) ELT 641 (SC) and Tribunal's Larger Bench decision in the case of Vandana Global Ltd. Vs CCE Raipur - 2010 (253) ELT 440 (Tri.-LB).

6. Heard both sides and perused the records. I find that the assessee is engaged in the export of services. Cenvat credit in respect of unutilized input credit was accumulated in the record of the assessee. When refund thereof was claimed, the said was disallowed by the adjudicating authority.

7. There is no dispute that export of goods and services are not taxable and registration is not a criteria to allow refund when the output service is not liable to duty or tax. The decision of Hon'ble Karnataka High Court in the case of mPortal India Wireless Solutions P. Ltd. Vs CST Bangalore  2012 (27) STR 134 (Kar.) is squarely applicable to the facts of the instant case wherein the High Court has held that limitation under Section 11B does not apply to refund of accumulated cenvat credit and therefore bar of limitation cannot be a ground to reject refund of cenvat credit to the assessee following the judgement of Hon'ble High Court of Karnataka in the case of mPortal India Wireless Solutions P. Ltd. (supra). The relevant paras-6 & 7 of the aforecited Hon'ble High Court judgement are reproduced below :-

6. The assessee is a 100% export oriented unit. The export of software at the relevant point of time was not a taxable service. However, the assessee had paid input tax on various services. According to the assessee a sum of ₹ 4,36,985/- is accumulated Cenvat credit. The Tribunal has categorically held that even though the export of software is not a taxable service but still the assessee cannot be denied the Cenvat credit. The assessee is entitled to the refund of Cenvat credit. Similarly insofar as refund of Cenvat credit is concerned, the limitation under Section 11B does not apply for refund a accumulated Cenvat credit. Therefore, bar of limitation cannot be a ground to refuse Cenvat credit to the assessee.

7. Insofar as requirement of registration with the department as a condition precedent for claiming Cenvat credit is concerned, learned counsel appearing for both parties were unable to point out any provision in the Cenvat Credit Rules which impose such restriction. In the absence of a statutory provision which prescribes that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund, the three authorities committed a serious error in rejecting the claim for refund on the ground which is not existence in law. Therefore, said finding recorded by the Tribunal as well as by the lower authorities cannot be sustained. Accordingly, it is set aside.

The Karnataka High Court has held that the time limit does not apply for the refund of accumulated cenvat credit. On this core, the appeal is allowed in so far as the aspect of additional premises is concerned. The submissions of both the sides, are at factual variance in as much as the appellant had contended that they had shifted their business premises to a new address and the respondent revenue contends that they had registered with the department only on 25-05-2010. The judgement of the Karnataka High Court is wide enough to cover both the situations and therefore, whatever is the factual situation, that would not in any way alter the eligibility for refund. The Ld. A.R has not cited any judgement to the contrary which has better precedential value. Therefore by respectfully following the Karnataka High Court judgement, the pre-registration issue settled in favour of the appellant.

8. Regarding the third issue of ineligible input services, I find that the services have been received in respect of Customs Clearing Services received for the goods imported relating to their business and therefore qualify as an eligible input service for the purpose of availment of credit as the said services are for inward transportation of inputs.

9. In view of the foregoing discussions and findings, the appellant's case deserve merit on all the issues. Accordingly, the impugned order is set aside and all the appeals are allowed.

(Dictated and pronounced in open court)

 
 
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