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Motif India Infotech P Ltd. Versus Commissioner of Service Tax, Ahmedabad

Demand of service tax on import of services - Revenue neutrality - eligibility to avail Cenvat Credit - Business Support Services - Held that:- Appellant is covered as an exporter of services under the Export of Services Rules, 2005 and no services are provided by the appellant in India. It is observed from the case records that appellant has been getting refund claim from July 2006 onwards under Rule 5 of the Cenvat Credit Rules 2004. Any service tax payable by the appellant on reverse charge b .....

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d by the Revenue was rejected by holding that on the grounds that in a case of Revenue neutrality demand does not survive - service tax payable under Section 66A of the Finance Act 1994 was also admissible to the appellant as Cenvat Credit. As appellant is only an exporter of services and availing Cenvat Credit the same would have been admissible as refund under Rule 5 of the Cenvat Credit Rules 2004. It is Revenue neutral situation, therefore, demands are not sustainable on merits in view of th .....

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pearing on behalf of the appellant argued that appellant is a Software Technology Park Unit (STP Unit) engaged in the business of processing, contracting, developing and exporting Business Support Services. All the clients to whom the appellant provides such services are located in foreign countries and none of the appellant s client is in India. It was his case that appellant is covered under the export of Service Rules, 2005 and is not required to pay any service tax. That appellant has taken .....

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ated abroad under business auxiliary services and business support services, and service tax has to be paid under Section 66 A of the Finance Act 1994 effective from 19.04.2006 as it was not clear whether services received by a person residing in India from a service provider situated abroad will be taxable in India. 3. Learned Advocate argued that appellant was not providing any services in India and was getting refund of service tax under Rule, 5 of the Cenvat Credit Rules for services availed .....

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(248) E.L.T. 810 (Tri.-Del.) (ii) Mosar Baer India Ltd. Vs. Commissioner of Central Excise & Customs, Noida 2010 (250) E.L.T. 79 (Tri. Del.) (iii) Rukmani Packwell Traders 2014-Tiol-1645-CESTAT.MAD 4. It was also argued that there can not be any intention to evade payment of service tax because service tax paid on reverse charge basis under Section 66A of the Finance Act 1994 was admissible to the appellant as credit and further by way of refund under Rule 5 of the Cenvat Credit Rules and ap .....

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pect Learned AR relied upon the following case laws:- (a) Dharampal Satyapal Vs. Commissioner of Central Excise, New Delhi 2005 (183) E.L.T. 241 (S.C.) (b) Commissioner of Central Excise, Mumbai Vs. Mahindra & Mahindra Ltd. 2005 (179) E.L.T. 21 (SC) 6. Heard both sides and perused the case records, the issue involved in the present proceeding is whether the demand issued to the appellant is required to be set-aside on grounds of Revenue neutrality and limitations. It is the case of the appel .....

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India, therefore, the entire service tax so paid would have been admissible as Cenvat Credit and refundable to the appellant as per the provisions of Rule, 5 of the Cenvat Credit Rules, 2004. In the case of Commissioner of Central Excise Chandigarh Vs. Dharampal Satyapal 2009 (248) E.L.T. 810 (Tri. Del.) was relied upon the appellant. In this case appeal filed by the Revenue was rejected by holding that on the grounds that in a case of Revenue neutrality demand does not survive. Para 2 and 3 of .....

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ted 15-7-2004 [M/s. S.R. Fragrance Ltd. (now Dharampal Satyapal Ltd.) v. CCE, Chandigarh - 2009 (235) E.L.T. 877 (T)] wherein the Tribunal set aside the demand of duty on identical issue on the ground of revenue neutrality. The relevant portion of the said decision of the Tribunal is reproduced below : 2. After hearing both sides, we find that the unbranded pan masala was admittedly being used captively in the manufacture of branded pan masala, which was being cleared on payment of NCCD. Apart f .....

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aid on the unbranded product. As such, we are of the view that the entire exercise is revenue neutral and the demand of duty is required to be set aside on this ground itself. We order accordingly and allow the appeal with consequential relief to the appellant(s). 3. We also noted that the Tribunal in the case of Commissioner of Central Excise, Trichy v. Kulavi Tobacco Industry [2008 (227) E.L.T. 416 (Tri.-Chennai)] on the identical issue rejected the Revenues appeal on the ground that the deman .....

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e settled proposition of law. 8. Appellant had also argued that demand is time bar as the period is from the financial year 2006-2007 and 2007-2008 whereas the Show Cause Notice is issued on 09.06.2009. Learned AR has relied upon the judgements passed by the Apex Court in the case of Dharampal Satyapal Vs. Commissioner of Central Excise New Delhi (Supra) and Commissioner of Central excise Mumbai Vs. Mahindra & Mahindra (P) Ltd. (Supra). It is observed from the facts of the case in Dharampal .....

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