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Rose IT Solutions Pvt Ltd Versus CST, Delhi-II

2015 (4) TMI 430 - CESTAT NEW DELHI

Refund of cenvat credit - export of non-taxable servcies - Notification No. 5/2006-CE (NT) - information technology software service - Service became a taxable service from 16/5/2008 and therefore prior thereto no credit in respect of that service was admissible and no refund was admissible - Held that:- under Rule 5 ibid refund of Cenvat credit is allowed only in respect of input services used in providing "output service" which is exported. "Output service" during the relevant period was to me .....

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ervation of CESTAT that this benefit is apparently not limited by provisions of Cenvat Credit Rules is devoid of any basis at all. In any case, as CESTAT itself observed that this plea was not taken by the appellant and having regard to the fact that CESTAT also gave this finding rather tentatively, as is evident form the word "apparently" appearing in that sentence, it can not be inferred that CESTAT laid down any ratio to be followed as a precedent. - impugned order does not suffer from any le .....

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in respect of export of their "service" prior to 16.5.2008 was rejected in terms of provisions of Notification No. 5/2006-CE (NT) on the ground that the "information technology software service" became a taxable service from 16/5/2008 and therefore prior thereto no credit in respect of that service was admissible and no refund was admissible. The appellants have contended that (i) they are a 100% of EOU (STPI Unit) engaged in export of 'Information Technology Software Se .....

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ed for export of information technology software service which was not taxable during the disputed period. They citied the judgement dated 23.9.2011 of Hon'ble Karnataka High Court in the case of mPortal India Wireless Solutions (P) Ltd Vs. C.S.T. in the CEA No. 6/2011. The appellants also referred to the Circular of the Board 54/2004-Cus dated 13/10/2004 which in Para 4 clarified as under:- At present, EOUs (including STP/EHTP units) are allowed to import as well as procure goods from domes .....

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per the Cenvat Credit Rules, 2004, including payment of duty on their DTA sales. 2. I have considered the contentions of the appellants. Rule 5 of the Cenvat Credit Rules reads as under:- "RULE 5. Refund of CENVAT credit:- where any input or input service is used in the manufacture of final product which is cleared for export under bond or letter of undertaking as the case may be, or used in the intermediate product cleared for export, or used in providing output service which is exported, .....

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mitations, as may be specified, by the Central Government, by notification." It is thus evident that under Rule 5 ibid refund of Cenvat credit is allowed only in respect of input services used in providing "output service" which is exported. "Output service" during the relevant period was to mean a "taxable service" as per definition under Rule 2 (P) ibid. Thus it is evident that prior to 6.5.2008 the appellants were not exporting any "output service" .....

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hence what was exported did not qualify to be "output service" and therefore their case is not covered under the provisions of Notification No. 5/2006-CE(NT). Further in the given context, input or input services as per Rule 2 (k) and 2 (l) ibid are those used for providing "output service". Thus it is obvious that there can not be any "input" or "input service" for taking Cenvat credit when there is no output service provided. In the present case the app .....

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permit taking of any Cenvat credit by the appellants when they did not provide /export any "Output Service". As regards the judgement in the case of M/s mPortal India Wireless Solutions.(P) Ltd passed by Hon'ble Karnataka High Court (supra) it is seen that in that judgement the only issue decided by the Hon'ble Court was whether the authorities were justified in refusing to grant refund of Cenvat credit to which the assessee was legally entitled only on the ground that the ass .....

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