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2016 (2) TMI 28 - CESTAT MUMBAI

2016 (2) TMI 28 - CESTAT MUMBAI - 2016 (42) S.T.R. 764 (Tri. - Mumbai) - Cenvat credit and refund claim thereof for the period prior to registration - export of IT enabled services - nexus of input services with output services - Held that:- there is no provision in law that Cenvat credit can be allowed only after registration of the unit, cenvat credit is allowed in respect duty suffered on input/input services and the said payment is nothing to do with the registration of the recipient of the .....

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ich have been received and used by the appellant are deemed to have been used for providing output services which have been exported. Since there is no provision for domestic services, the ratio of services that how much related to export and how much related to domestic does not arise. Moreover, all these services as per its' use explained in the appeal memo, we find that all the services are essential for providing the call center services. - appellant is entitled for refund except amounts of .....

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. RBT/111/2011, OIA No. RBT/115/2011 dated 21/3/2011 and OIA No. RBT/135/2011 dated 28/3/2011 passed by the Commissioner (Appeals) Central Excise, Mumbai, wherein Ld. Commissioner rejected Cenvat credit and refund claim thereof for the period prior to registration i.e. 25/8/2006 and partly Cenvat credit refund was allowed. 2. The Fact of the case is that the appellant are engaged in business of IT enabled service vis, Customer Contact Centers services. Transaction Processing Services and merit c .....

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ity partly sanctioned refund claim and partly rejected. The appellant aggrieved by the rejection portion of the refund claim filed appeal before the Commissioner (Appeals), who also allowed the Cenvat Credit and refund partly and rejected part of the refund. Ld. Commissioner (Appeals) precisely rejected the refund claim on the following grounds: (a) Cenvat Credit availed prior to application of service tax registration i.e. 25/8/2008 is not admissible for refund. (b) Cenvat Credit on input servi .....

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sultant Services, (iv) Club and Association Services, (v) Convention Services, (vi) Cable Services, (vii) Facilities and Management Services, (viii) Real Estate Agent Services, (ix) Dry Cleaning Services, (x) Business Auxiliary Services, (xi) Manpower Recruitment Services, (xii) Management or Repair Services. Aggrieved by the aforesaid three impugned orders dated 21/3/2011, 21/3/2011 and 28/3/2011 the appellant filed these appeals. 3. Ms. Rinku Jasuja, of M/s PDS Legal, Ld. Counsel for the appel .....

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nied. She further submits that substantial amount of refund was rejected on the ground that prior to 1/3/2006 the services of the appellant i.e. Call center Services were exempted. In this regard she submits that this is a case of refund of accumulated Cenvat credit and not in respect of service tax on output services therefore even though the output service was exempted, refund could not have been denied as the accumulation of Cenvat credit in respect of input services which were used in the ou .....

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ater than the amount of service tax on the invoices. She submits that the appellant is not contesting this issue. Accordingly she concede that they give up the claim of this amount. 3.2 As regard Cenvat credit and refund denied on banking and other financial services on the ground that the bank statement is not proper document, she submits that in case of banking and financial services there is relaxation provided under proviso to sub rule (1) of Rule (4A) of Service Tax Rules. According to whic .....

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these services do not have nexus with output services, she submits that the appellant have provided call center services for which all the services on which refund was denied are essential services. The use of each and every services has been explained in appeal memo. It is undisputed that the entire output service of the appellant is exported and no portion of the appellant is sold in India. If this is so, all the input services which were admittedly received by the appellant are indeed used fo .....

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ngs of the impugned order. 5. We have carefully considered the submissions made by both sides. 6. Regarding the Cenvat credit and refund thereof on the ground that Cenvat credit was availed prior to registration, we find that there is no provision in law that Cenvat credit can be allowed only after registration of the unit, cenvat credit is allowed in respect duty suffered on input/input services and the said payment is nothing to do with the registration of the recipient of the services therefo .....

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cribes 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. Commissioner of Service Tax, Mumbai-II Vs. J.P. Morgan Services India Pvt Ltd. [2015 (38) STR 410 (T .....

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find nothing substantial in the series of communications to indicate that some important elements to be considered for registration are missing in the application, such as the premises which is sought to be registered. The judgments cited by Commissioner (Appeals) are relied upon. Further, judgment of the Karnataka High Court in the case of mPortal India Wireless Solutions Pvt. Ltd. vs. C.S.T. Bangalore 2012 (27) STR 134 (Kar.) which held that there is no restriction in availing cenvat credit b .....

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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." Beico Industries Pvt Ltd Vs. CCE & ST, Vapi [2014 (36) STR 551 (Tri. Ahmd)] 9. While trying to deny the Cenvat Credit to the appellant on this ground, we find that the adjudicating authority has taken .....

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re is no dispute that appellant has received the capital goods and the input services, utilized them for setting up the manufacturing facilities. To deny credit of the central excise duty paid and service tax paid, would be travesty of justice, more so when the assessee herein is discharging appropriate excisable duty on the finished goods cleared after taking the registration certificate. We also find that there is no dispute as to the fact that the Cenvat Credit on the items like capital goods .....

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of in respect of input services used in the provision of exempted call center service, we find that it is Government Policy across the Board that in case of export neither input tax/duty nor output tax/duty should be exported therefore either duty/tax should not be charged at both the stage or if at all due to practical working if duty/tax is charged, it has to be refunded to the exporter. In the present case export is not under dispute and service tax suffered on the input services is also not .....

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eld that they are taxable. Only with regard to some of the input services, the Commissioner (Appeals) in his order had expressed certain doubts as to their entitlement for credit and remanded the matter to the Original Authority. Both the orders are under challenge. In terms of the agreement entered by the appellant, the following services are provided to the recipients situated abroad: a) Call centre services including technical support, customer care contact services and sales facilitation ser .....

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e scope of "Business Auxiliary Service." The extract of the Board's Circular is reproduced here: "2. Scope of IT service under Business Auxiliary Service: .. 2.3. It is clarified that there is no contradiction between the clarifications dated 28.02.2003 and dated 20.06.2003. The scope of IT services is explained in the definition of Business Auxiliary Service in the Act itself as any service in relation to designing, developing or maintaining of computer software or computeriz .....

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marily in relation to operation of computer system will be covered as IT services and not taxable. Payroll processing, accounts management etc. even by using computer programs, cannot be termed as activities primarily in relation to computer systems. The use of computer in these services is secondary and the primary activity is that of business-related work. Thus, these services will be taxable as Business Auxiliary Services. This is exactly the position that has been clarified in the circular d .....

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ed for the rebate, which is equal to the service tax paid on the input services. Going by the definition of the "input service" under Rule 2(1) of the Cenvat Credit Rules, 2004 the service utilized by the appellants for providing output service can indeed be considered as input services. We also take note that the definition of "input service" indicates that the interpretation should be done in a liberal way in view of the phrase "activities relation to business", t .....

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d by them during the relevant period. In view of the above findings we allow the appeals with consequential relief. Zenta Pvt Ltd. Vs. CCE Mumbai 4. Considering the submissions made by both the sides, we find that as per Rule 5 of the CENVAT Credit Rules, 2004, if the assessee is providing taxable service although they are exempt by way of notification, but have been exported, then the assessee is entitled to take input service credit. Same view was taken by this Tribunal in the case of Dell Int .....

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ief. In view of the above judgments it can be seen that the Cenvat credit/refund claim in respect of input services used even in exempted services which has been exported, cannot be denied. 6.2 As per Ld. Counsel, the appellant is not claiming the refund in respect of ₹ 3581/- which was held to be greater than the amount of service tax on the invoices, we upheld the rejection of refund claim in respect of said amount. 6.3 Regarding the denial of Cenvat credit/refund claim in respect of ban .....

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llan shall include any document, by whatever name called, whether or not serially numbered, and whether or not containing address of the person receiving taxable service but containing other information in such documents as required under this sub-rule." In view of the above clear provisions, any documents of the bank is sufficient for taking Cenvat credit. The bank statement is rather a document which shows all the debit and credit transaction in the account of the appellant therefore in o .....

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uxiliary Services, (xi) Manpower Recruitment Services, (xii) Management or Repair Services. On the ground that these services have no nexus with the output service. In our view, firstly the appellant is engaged in export of 100% services and no part of the services is provided in India with this reason alone all the services which have been received and used by the appellant are deemed to have been used for providing output services which have been exported. Since there is no provision for domes .....

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llant's own case the refund in respect of identical services have been sanctioned and no further dispute raised by the department. The relevant order number and services on which refund was sanctioned are given as under: (a) Refund order No. 2203/R(KHA)/10-11 dated 26/10/2010 in the appellant's own case (April 2007 to September, 2007). Management or Business Consultants Services, Business Auxiliary Services, Event Management Services, Repair and Maintenance Services Mandap Keeper's S .....

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