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2016 (2) TMI 313 - CESTAT MUMBAI

2016 (2) TMI 313 - CESTAT MUMBAI - 2016 (42) S.T.R. 579 (Tri. - Mumbai) - Refund of unutilized cenvat credit - export of services - distinguish between the refund claims as those prior to registration and those post-registration - Held that:- In the absence of a statutory provision which prescribes that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund, the authorities committed a serious error in rejecting the claim for r .....

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the lower authority in rejecting their claims for refund of ₹ 5,31,86,246/- in all four claims pertaining to the periods October 2006 to December 2006, January 2007 to March 2007; April 2007 to June 2007 and July 2007 to September 2007 which had been filed on different dates between 26th December 2007 and 25th February 2008. 2. The appellant is a unit operating under Software Technology Parks (STP) scheme in the Foreign Trade Policy of the Government of India and is, primarily, an exporte .....

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rendered domestically, a substantial amount remains unutilized; they sought refund of the balance credit as per entitlement under Rule 5 of the CENVAT Credit Rules, 2004. The appellant is registered as a supplier of 'banking and other financial services', 'business auxiliary services', 'business support services' and 'management, maintenance or repair services'. In addition, the appellant also undertakes software development which is not taxable. 4. Consequent up .....

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prior to registration and those post-registration. It would appear that the appellant had taken registration as providers of 'banking and other financial services' on 5th October 2006 and it was only on the 7th May 2007 that 'business auxiliary services and 'business support services' were incorporated in the service tax registration. Therefore, the impugned order has found the appellant ineligible for refund for the period from 5th October 2006 to 7th May 2007 as availment .....

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at the services from the registered premises were also not segregated to enable grant of refund in relation to that premises alone. 6. While acknowledging that the appellant is substantially an exporter of services covered under Rule 5 of the Cenvat Credit Rules, 2004 for accumulated input service credit that could not be utilized for domestic supply of services, the impugned order has held that the conditions of the Notification 5/2006-CE (NT) dated 14/03/2006 had not been complied with, in ter .....

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t is the ceiling and refund is liable to be sanctioned to the actual extent of unutilized credit in relation to the exports subject to the ceiling. In view of the inability of the appellant to produce details of unutilized cenvat credit in relation to export of services the refund claim is inadmissible. 7. The learned counsel for the appellant has cited the decision of this Tribunal in their own case i.e., Commissioner of Service Tax, Mumbai II vs. J P Morgan Services India Pvt. Ltd. [2015 (38) .....

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yment of service tax. For convenience we may refer to the definition of input service as below: "'input service' means any service:- (i) used by a provider of taxable service for providing an output service, or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final product up to the place of removal, and includes services used in relation to setting up, modernization, renovation, repair, of a facto .....

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al." We may also refer to the amendment in notification No. 5/2006 by Section 74 of the Finance Act 2010. The amendment reads as: "74. Amendment of notification issue under rule 5 of the CENVAT Credit Rules, 2004- In the notification of the Government of India in the Ministry of Finance (Department of Revenue) number of G.S.R. 156 (E), dated the 14th day of March, 2006, issued under Rule 5 of the CENVAT Credit Rules, 2004, with effect from the 14th day of March, 2006- (A) in the openin .....

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used for providing output services. On going through the list of 21 services, we find no reason to come to any sort of conclusion that these input services are not used in providing the services exported by the respondent. Further, on referring to the definition of input services we also find that input services used in relation to business are covered in the definition. Even, all input services used for modernization, renovation or repair to the office premises are also covered. We do not agree .....

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nput service credit as discussed above has been upheld by a string of judgments of this Tribunal such as the case of Commissioner of C. Ex, Nagpur vs. Ultratech Cement Ltd. 2010 (260) ELT 369 (Bom), Commissioner of C. Ex, & Service Tax, LTU vs. Lupin Ltd. 2012 (28) STR 291 (Tri. Mumbai) and Commissioner of Service Tax vs. Convergys India Pvt. Ltd. 2009 (16) STR 198 (Tri.Del). In the end we have no doubt that the services utilized are input services and refund of credit on these services is a .....

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, the respondents have rightly relied on Rule 4 of the Service Tax Rule under which registration is deemed to be granted within seven days of the application for registration. In the present case, the respondent had applied for centralized registration on 5.10.2006. Some communication took place thereafter between the respondent and the department which has been shown by the respondent and the registration was finally granted on 26.12.2008. We find nothing substantial in the series of communicat .....

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ourt held that "insofar as requirement of registration with the department as a condition precedent for claiming Cenvat credit is concerned, learned counsel appearing for both parties were unable to point out any provisions in the Cenvat Credit Rules which impose such restriction. In the absence of a statutory provision which prescribes 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 comm .....

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aws our attention to the decision of this Tribunal in KPIT Cummins Infosystems Ltd. vs. Commissioner of Central Excise, Pune - I [2013 (32) STR 356 (Tri. - Mumbai) which has held: "5.4 Accordingly, Notification NO. 5/2006-CE (N.T.) dated 14/03/2006 has been issued. Rule 6 of CENVAT Credit Rules, 2004 deals with obligation of the manufacturer of dutiable and exempted goods and provider of taxable and exempted services. Under Rule 6(3)(c), the provider of output service shall utilize credit o .....

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respect of IT software services during the material period. 5.5 The appellant has received input/input services for rendering of taxable services during the material period, which has been exported. The hon'ble High Court of Karnataka in mPortal India Wireless Solutions P. Ltd. (supra) case, in a similar situation, held as follows: "6. The assessee is a 100% export oriented unit. The export of software at the relevant point of time was not a taxable service. However, the assessee had p .....

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ar of limitation cannot be a ground to refuse cenvat credit to the assessee. 7. Insofar as requirement of registration with the department as a condition precedent for claiming cenvat credit is concerned, learned counsel appearing for both parties were unable to point out any provision in the cenvat credit rules which impose such restriction. In the absence of a statutory provision which prescribes that registration is mandatory and that if such a registration is not made the assessee is not ent .....

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