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2015 (6) TMI 871 - CESTAT NEW DELHI

2015 (6) TMI 871 - CESTAT NEW DELHI - 2015 (39) S.T.R. 998 (Tri. - Del.) - Rejection of refund claim - Claim for refund of service tax of renting of immovable properties taken on sub-lease - Held that:- It is axiomatic and this position follows from Explanation (c) of Section 67 of the Finance Act, 1994, that M/s HCL Technologies Limited would be liable to remit service tax on the mere recording of a debit or credit notes in respect of a transaction with an associated enterprise, such as the app .....

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ting the true transaction between the parties. This principle of law, that a suspicion however grave cannot be a foundation for a logical conclusion of fact, is well settled.

Board Circular No. 120/01/2010-ST dated 19.01.2010, vide paragraphs 3.1.1 and 3.3 clearly enjoins that there is no requirement of a precise or a one-to-one correlation between an input service leading to an output service. The decisions of this Tribunal in Commr. of C. Ex. Vadodara vs. Transatlantic Packaging Pvt .....

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the debit note, by the lease deed of M/s HCL Technologies Limited and the sub-lease deed of the appellant, the preponderance of probabilities legitimises the conclusion that renting of immovable property was the input service utilised for the exported output service provided by the appellant. - Decided in favour of assessee. - Service Tax Appeal No. 51621/2014-SM - Final Order No. A/51433/2015-SM(BR) - Dated:- 8-4-2015 - G Raghuram, President,J. For the Petitioner : Shri Manish Gaur, Adv. For t .....

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e relevant documents) but rejecting claim of refund of credit of service tax of ₹ 21,42,757/-, paid by the appellant on immovable property taken on rent from its holding company M/s HCL Technologies Limited. A appeal was preferred against the adjudication order dated 30.04.2013 which rejected the claim for refund of service tax liability incurred in respect of renting of immovable properties; and two other elements, which were however allowed by the appellate Commissioner. 2. On 12.12.2012 .....

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appellant failed to prove remittance of service tax to the Government exchequer; that one of the premises Arihant Building is not the registered premises in specified Form ST-2 which also does not contain the name of the building; and that the debit note is issued in the name of Arihant building" while refund is claimed for service tax on inputs while the export is made much later i.e. during January 2012 to March 2012, in respect of rent pertaining to a much earlier period i.e. July 2008 .....

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y, the appellate Commissioner held (concurring with the primary authority that since the rent pertains to the period July 2008 to June 2010 and service tax and the rent was remitted qua a debit note entry (on 29.02.2012), the transaction between M/s HCL Technologies Limited and the appellant cannot be said to be an arm's length transaction since the lessor accepted payment of rent after two to three years. Therefore, the appellate Commissioner reasoned, debit notes are inadmissible and the c .....

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s mentioned in the Form ST-2 certificate; that the appellant provided a copy of the lease deed executed on 12.12.2011 which does not pertain to the lease period from July 2008 to June 2010 for which the rent was remitted by way of a debit note of M/s HCL Technologies Limited and therefore the appellate Commissioner agrees with the finding of the adjudicating authority that the premises was not the registered premises. 6. The third reason adduced by the appellate Commissioner for rejecting the re .....

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eriod January 2012 to March 2012, the input service i.e. rent of the premises has no nexus with the output service exported during January 2012 to March 2012. 7. In our considered view the three reasons recorded by the appellate Commissioner for rejecting the claim for refund are unsustainable. On 23.02.2007, a lease deed was entered into between the owner of Sterling Tower, 327 Anna Salai, Chennai and M/s HCL Technologies Limited as the "lessee", an expression deemed to include its su .....

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hnologies Limited had obtained lease of the self-same premises is for the purpose of its normal and usual business under any of its subsidiary company/sister company as well; and that the appellant - M/s HCL Comnet Systems and Services Limited is a subsidiary company of M/s HCL Technologies Limited. The debit notes by M/s HCL Technologies Limited, copies of which are filed in the appeal also record debit entries in respect of rent for the premises as well as service tax and the cess thereon, evi .....

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nt thereon by the appellant to M/s HCL Technologies Limited evidenced by the debit note constitutes proof of the appellant having incurred in service tax liability in respect of the lease of immovable property from M/s HCL Technologies Limited as a sub-lessee. The burden therefore shifts to the Revenue to establish that the debit note recorded by M/s HCL Technologies Limited is a fraudulent instrument not reflecting the true transaction between the parties. A mere suspicion, has been as recorded .....

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pertaining to Road/ Street/ Lane it is recorded as Sterling Technopolis, Chennai. M/s HCL Comnet Systems & Services Limited is the name of the appellant and therefore it could not have been the name of the premises, clearly a typographical error. While this is so, an analyses of the debit note, the lease deed between the owner of the premises and M/s HCL Technologies Limited, dated 23.02.2007 and the sub lease deed between M/s HCL Technologies Limited and the appellant, dated 12.03.2011, le .....

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