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Commissioner of Central Excise, Pune-III Versus Zensar Technologies Ltd.

2015 (11) TMI 1561 - CESTAT MUMBAI

Computation of refund – CENVAT credit - Rule 5 of CCR Rules – onsite service turnover considered under export turnover and/or total turnover - Notification No. 5/2005-C.E. (N.T.), dated 14-3-2006 - onsite services provided through overseas branches of the appellant is export service or otherwise – Held that: - the services shall be treated as export if payment of such services is received by the service provider in convertible foreign exchange. Onsite services treated as export as payment receiv .....

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n allowed. This has been held in the case Finolex Cables Ltd. v. Commr. of C. Ex, Pune-I 2015 (12) TMI 1487 - CESTAT MUMBAI – matter remanded – appeal disposed off. - ST/89104, 89485 & 89664-89665/2013 and Cross Objection Nos. ST/CO/91191, 91084, 91086 & 91087/2014-Mum - Final Order Nos. A/85123-85130/2016-WZB/SMB - Dated:- 27-11-2015 - Shri Ramesh Nair, Member (J) Shri A.B. Kulgod, AC (AR), for the Appellant. Shri Vinay Jain, CA, for the Respondent. ORDER These appeals and COs are directed ag .....

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accumulated Cenvat credit. For the purpose of computing refund amount, the appellant has not considered onsite services provided through their overseas branch either in the export turnover or in the total turnover. On the basis of above computation the adjudicating authority while disposing of the refund claim added the onsite service value in the total turnover of the appellant company but not included in the export turnover as a result refund amount as against the claim of the appellant stand .....

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issues in the appeals are that refund was rejected on the club membership services and some other services. The appellant is contesting the refund related to services of Club Membership, however all other services which was held by the lower authority as inadmissible are not being contested. The Revenue, being aggrieved by the impugned orders filed these appeals on the ground that onsite service provided by overseas branch of the appellant is not in the nature of export services, therefore, the .....

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g the grounds of appeal submits that ld. Commissioner (Appeals) has wrongly allowed the refund accepting the computation on the basis that onsite service value is not includible in the total turnover. He submits that onsite service provided through overseas branches have been provided from India, therefore it should not be considered as export turnover however though the service was provided from the overseas branches of the appellant it is part and parcel of the total business transaction of th .....

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Cenvat credit on the input services used in export of services. He submits that the onsite services provided through their overseas branches is export of service in terms of Rule 3(2)(b) of Export of Service Rules, 2005 prevailing at relevant time. In this provision the only condition to constitute a service as export of service is that the payment of such service is received by the service provider in the convertible foreign exchange. Therefore, whether service is provided from India or through .....

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ue for rejection of the refund claim shall not survive. It is his submission that assuming the onsite service value of overseas branch is not considered as export service then for the same reason it should also not be added in the total turnover. As regard the club membership service, he submits that club membership fees are not fees collected for personal use of employees or recreational activity of the employee. The said office expenses are incurred for membership under Confederation of Indian .....

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, dated 14-3-2006 issued under Rule 5 of CCR, 2004 in terms of condition 5 which is reproduced below : 5. The refund of unutilised input service credit will be restricted to the extent of the ratio of export turnover to the total turnover for the given period to which the claim relates, i.e., Maximum refund £ Total Cenvat credit taken on input services during the given period x export turnover + Total turnover. Illustration. - If total credit taken on input services for a quarter = &# .....

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. Total turnover means the sum total of the value of, - (a) all output services and exempted services provided, including value of services exported; (b) all excisable and non-excisable goods cleared, including the value of goods exported; (c) The value of bought out goods sold, during the given period. From the above it can be seen that refund of unutilized service credit will be restricted to the extent of ratio of export turnover to the total turnover for the given period to which the refund .....

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(zzzh), (zzzr), (zzzy), (zzzz), (zzzza) & (zzzzm) of clause (105) of section 65 of the Act, be provision of such services as are provided in relation to an immovable property situated outside India; (ii) specified in sub-clauses (a), (f), (h), (i), (j), (l), [* * *], (n), (o), [* * *], (w), (x), (y), (z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv), (zw), (zza), (zzc), (zzd), (zzf), (zzg), (zzh), (zzi), (zzl), (zzm), (zzn), (zzo), (zzp), (zzs), (zzt), (zzv), (zzw), .....

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s or material or any immovable property, as the case may be, situated outside India at the time of provision of service, through internet or an electronic network including a computer network or any other means, then such taxable service, whether or not performed outside India, shall be treated as the taxable service performed outside India; (iii) specified in clause (105) of section 65 of the Act, but excluding, - (a) sub-clauses (zzzo) and (zzzv); (b) those specified in clause (i) of this .....

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rcial establishment or any office relating thereto, in India, such taxable services provided shall be treated as export of service only when order for provision of such service is made from any of his commercial establishment or office located outside India: Provided further that where the taxable service referred to in sub-clause (zzzzj) of clause (105) of section 65 of the Act is provided to a recipient located outside India, then such taxable service shall be treated as export of taxable serv .....

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installation structures and vessels located in the continental shelf of India and the exclusive economic zone of India, for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof. In terms of above sub-rule (2)(b), the services shall be treated as export if payment of such services is received by the service provider in convertible foreign exchange. In the present case though the services provided onsite through the overseas branch of the respon .....

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