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Commissioner of Central Excise, Puna-I Versus Rosy Blue (India) (P.) Ltd.

2015 (10) TMI 2409 - CESTAT MUMBAI

Stay on Refund of cenvat credit - Banking and financial services and technical inspection and certification services – Import of Rough Diamonds - Revenue contends that scope of Notification 17/2009-S.T is very specific and no scope for allowing refund of credit pertaining to services utilised by Respondents. - Held That:- Contentions of Revenue that service tax paid on 'banking and other financial services' and 'technical inspection and certification services' cannot be correlated to export .....

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re – Decision made in case of Meghmani Dyes & Internationals Ltd. v. CCE [2014 (1) TMI 558 - CESTAT AHMEDABAD] followed – Stay rejected. - APPLICATION NO.ST/STAY-92472 TO 92478/2015, APPEAL NO. ST/85337 TO 85343/2015 - Final Order Nos. A/3120-3126/2015-WZB/STB - Dated:- 28-8-2015 - M.V. RAVINDRAN, AND C.J. MATHEW, JJ. For Th eAppellant : S.V. Nair, Asstt. Commissioner (AR) For The Respondent : Bharat Raichandani, Adv. ORDER M.V. Ravindran, Judicial Member - These appeals arc filed by the Revenue .....

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efund of the amount of service tax paid on input service i.e. 'banking and financial services' and 'technical inspection and certification services'. The respondent's are engaged in the business of import of rough diamonds and manufacture and export of cut and polished diamonds and is a star trading house. The respondent submitted from time-to-time various applications for refund of CENVAT credit which were in respect of service tax paid on 'clearing and forwarding servic .....

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ct of the non-sanctioning of refund on 'banking and other financial services' and 'technical inspection and certification services'. 5. Learned Departmental representative would draw our attention to the findings recorded by the adjudicating authority and also the grounds of appeals. It is his submission that the refund claims are filed as per Notification 17/2009-S.T. and the said provisions are very specific and there is no scope for allowing refund of CENVAT credit pertaining .....

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t of goods while the CENVAT credit availed is in respect of the services which were rendered for import of goods also. It is his submission that the Notification 17/2009-ST is an exemption Notification and needs to be strictly followed. It is his submission that in certain cases input invoices could not be correlated with the export documents. He would also draw our attention to the fact that details of the service tax paid on these two services is also in respect of the items which were not in .....

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dent of import and export of diamonds and the issue is now squarely covered by the decision of the Tribunal in the case of CST v. Convergys India (P.) Ltd. [2009] 21 STT 67 (New Delhi - CESTAT). He would also submit that this bench of the Tribunal in the case of KAPIT Cummins InfoSystems Ltd. v. CCE [2014] 43 GST 266 (Mum. - CESTAT) has also held that any services rendered for the export of goods or services are eligible for refund as per the provisions. He would also submit that the Hon'ble .....

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axmann.com 507 has also asserted that the explanations to Notification must be so construed as not to eliminate the distinction between the words and should be construed keeping in view the object and purpose of the exemption Notification. It is his submission that this Tribunal in the case of Meghmani Dyes & Internationals Ltd. v. CCE [Final Order No. A/2078/2011-WZB/Ahd, dated 22-11-2011] has held banks charges paid in relation to the purchase of raw materials and sale of finished goods re .....

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respondent used various input services and two of the services which are in dispute are the 'banking and financial services' and 'technical inspection and certification service'. We find that the Revenue's contention in these appeals that the service tax paid on 'banking and other financial services' and 'technical inspection and certification services' cannot be correlated to the export of goods manufactured by the respondent and that the services arc also i .....

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case in hand, we find that the banking services are utilised by the respondent for raising finance for import as well as for the purpose of export of the goods manufactured by him. In our view, the interpretation put forth by the learned departmental representative and by the Revenue in the grounds of appeal of Notification 17/2009-ST are very narrow, cannot be accepted. This our above view is fortified by the judgment of the Tribunal in the case of Convergys India Services (P.) Ltd. (supra) wh .....

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uch and services becomes part of the cost of the final product or the cost of the output services, as the case may be, then they are understood as input and input services in relation to said final products or the output services." 8. The Hon'ble High Court Bombay in the case of ONGC (supra) in paragraph 13 laid down the law as to what should be construed of the expression 'input services' as defined under CENVAT Credit Rules. We reproduce the said paragraph. "13. The Appea .....

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th day of September, 2004; and (ii) any input service received by the manufacturer of final product or by the provider of output services on or after the 10th day of September, 2004." (Emphasis Supplied) In the present case, it is clause (ii) which is of relevance. Hence, in order to enable a manufacturer to avail of Cenvat credit, the requirement is that the duty of Excise ought to have been paid on any input service received by the manufacturer of a final product. The expression "inp .....

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service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place or removal." (Emphasis Supplied) Here ag .....

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earance of final products upto the place of removal. The expression "directly or indirectly" has a wide import. The service, in other words, need not be a service which is directly used by the manufacturer in the manufacture of a final product. The definition of "input service" comprehends within its sweep a service which is used by the manufacturer even indirectly, and in or in relation to the manufacture of a final product. Where the legislature or its delegate uses the exp .....

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or for provision of exempted services, save in the circumstances which are mentioned in Rule 6(2). Rule 6(2) deals with a situation where inter alia a manufacturer manufactures both dutiable final products as well as exempted goods. In such a situation, in order to avail of Cenvat credit, the manufacturer is required to maintain separate accounts for the receipt, consumption and inventory of inputs and input services meant for use in the manufacture of dutiable final products and the quantity o .....

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