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2016 (1) TMI 1130 - CESTAT MUMBAI

2016 (1) TMI 1130 - CESTAT MUMBAI - TMI - Refund claim - unutilized Cenvat credit lying in the Cenvat Credit account - Air Travel Agent's Service, Architect Service, Business Auxiliary Service, Business Support Service, Banking and Financial Services, Courier Service, Chartered Accountant Services, Commercial Training & Coaching Service, Event Management Service, Erection, Commissioning Installation, General Insurance Service For Employees, Health Service, Interior Decorator, Information Technol .....

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s utilized for providing output services - nexus between input and output services. - Held that:- all the services are essential services for providing output services. Appellants are exclusively engaged in export of services and no service are provided domestically. Therefore use of all the above services and expenditure thereof born by the appellant are essential services for providing output services. In my prima facie view, appellants are entitle for refund of service tax paid on the abo .....

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e 5 and Notification No. 5/2006-CE(NT) issued thereunder refund is eligible only in respect of excise duty/ service tax suffered on input/ input services used in export of goods, refund of excise duty paid on capital goods is not admissible in terms of Rule 5 of the CC Rules, 2004 and Notification issued there under. This position has been fairly conceded by the Ld. Counsel therefore Appeal No. ST/ 85008/ 15-MUM liable to be dismissed. - Partly appeals disposed of by way of remand - ST/85007 TO .....

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f the cases is that appellants are registered as a Service Tax assessee for providing various output services viz. Business Auxiliary Services, Online Information and Data, Commercial Training and Coaching Services. They are exporting their entire output services without payment of service tax and availing credit of service tax paid on their input services utilized for providing output services. The appellants had filed refund applications for refund of unutilized Cenvat credit lying in their Ce .....

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na Hirandagi with Ms. Manasi Patil, Ld. Counsels for the appellant submit that Ld. Commissioner(Appeals) upheld the rejection of refund claims on the ground that (i) some of the services do not have nexus with export of output services (ii) or not covered under input service definition (iii) or not essential (iv) or not related to output services, on this, she submits that the appellants before the lower authority described the use of such services and as per the use of the services it is clear .....

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1. Caliber Point Business Solutions Ltd. Vs. Commissioner of Service Tax, Mumbai, 2010 (18) S.T.R. 737 (Tri. - Mumbai) 2. Semco Electric Pvt. Ltd. Vs. Commissioner of Central Excise, Pune 2010 (18) S TR. 177 (Tri. - Mumbai) II. Architect Service 3. Commissioner of Service Tax, New Delhi Vs. M/s Convergys India Pvt Ltd 2009 (16) STR 198 (Tri-Del.) 4. Dell International Services India (P.) Ltd. Vs. Commissioner Central Excise (Appeals), Bangalore 2010 (17) S.T.R. 540 (Tri- Bang.) III. Business Au .....

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Tri. - Bang.) vi. CVD on Capital goods 9. PEE VEE Textiles Ltd. Versus Commissioner of Cus. & C. Ex., Nagpur 2005 (186) E.L.T. 252 (Tri. - Mumbai) vii. Courier Services 10. Dell International Services India (P.) Ltd. Vs. Commissioner Central Excise (Appeals), Bangalore 2010 (17) S.T.R. 540 (Tri. - Bang.) 11. Jeans Knit P. Ltd. vs. CC, Bangalore 2011 (21) S.T.R. 460 (Tri. - Bang.) viii. Chartered Accountant Services 12. CST v. Convergys India (P.) Ltd. 2009 (16) S.T.R. 198 (Tri. - Del.) - Aff .....

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, Bangalore 2010 (17) S.T.R. 540 (Tri. - Bang.) xi. Erection, Commissioning Installation 16. CST v, Convergys India (P.) Ltd. 2009 (16) S.T.R. 198 (Tri. - Del.) - Affirmed by Punjab & Haryana Court in 2010 (20) S.T.R. 166 (P&H) xii. General Insurance services For Employees & Office Assets 17. Millipore India Limited vs CCE, Bangalore 2009 (13) S.T.R. 616 (Tri. - Bang.) Affirmed by Karnataka High Court in 2012 (26) S.T.R. 514 (Kar.) 18. CCE & ST, LTU, Bangalore vs Micro Labs Ltd.2 .....

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ll International Services India (P.) Ltd. Vs. Commissioner Central Excise (Appeals), Bangalore 2010 (17) S.T.R. 540 (Tri. - Bang.) xvi. Legal Service 23. Golden Tobacco Ltd. vs CCE, Mumbai-I2013 (30) S.T.R. 594 (Tri. - Mumbai) xvii. Maintenance & Repairs Service 24. Dell International Services India (P.) Ltd. Vs. Commissioner Central Excise (Appeals), Bangalore 2010 (17) S.T.R. 540 (Tri. - Bang.) 25. Parason Machinery (I) Pvt. Ltd. Vs. Commissioner of Central Excise, Aurangabad 2009 (16) S.T .....

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Service 29. H.E.G. LTD. vs CCD, Raipur 2010 (17) S.T.R. 178 (Tri. Del.) xxi. Renting of Immovable property 30. Jeans Knit P. Ltd. vs. CC, Bangalore 2011 (21) S.T.R. 460 (Tri. Bang.) xxii. Outdoor catering service 31. Semco Electric Pvt. Ltd. Vs. Commissioner of Central Excise, Pune 2010 (18) S.T.R. 177 (Tri. - Mumbai) xxiii. Online Information and Database 32. Dell International Services India (P.) Ltd. Vs. Commissioner Central Excise (Appeals), Bangalore 2010 (17) S.T.R. 540 (Tri. - Bang.) xxi .....

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.R. 540 (Tri. - Bang.) 36. Parason Machinery (I) Pvt. Ltd. Vs. Commissioner of Central Excise, Aurangabad 2009 (16) S.T.R. 20 (Tri. - Mumbai) 37. Castrol India Ltd. Vs. Commissioner of Central Excise, Vapi 2013 (30) S.T.R. 214 (Tri. - Ahmd.) She submits that more or less all the services on which refund claims were made have been held to be eligible input services in the above cited judgments, therefore the Ld. Commissioner(Appeals) has wrongly denied the refund claim. On query from the bench on .....

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h export of services or used for personal use of staff and employee. As per the amendment w.e.f. 1/4/2011 in the definition of 'Input Service', services for personal use of staff and employee were excluded from the definition of input service, accordingly appellants are neither entitle to avail the Cenvat credit not for refund of service tax paid by them. 5. I have carefully considered the submissions made by both sides. 6. Before concluding that whether the subject services are input se .....

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d expenditure for the above services. - The Appellant is in the business of providing services to its overseas customers (who do not have an office in India) hence overseas traveling of its employees/ management is part of its business. - Traveling to visit customer is essential inter alia to understand the customer needs, discuss business propositions and engaging the customer to secure additional work. - The Appellant has filed along with reply to SCNs, copies of Invitation Letters received fr .....

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ally covered under the inclusive part of the definition of input service. III. Business Auxiliary Service - The nature of our business requires us to store and retrieve computer and office records for the claims processed on behalf of our clients. Proper storage and retrieval of computer records are essential for provision of efficient output services, as in the absence of proper facilities for storage and retrieval of computer and office records would affect the services provided to our clients .....

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services from time to time to the Appellant for use of business centre facilities in UK. The services has been used only in relation to providing services which are exported. The Appellant has paid Service Tax on amount paid to TPSL, U.K. as a recipient of services under reverse charge mechanism as the said foreign service provider does not have any office in India, the Appellant have, as a recipient of services, registered themselves and paid service tax on this Business Support service. These .....

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rchase of forex for employees travelling abroad for official business purpose. It would not have been possible for appellant to provide output services without availing contemplated input services. Appellant provides 100% taxable output services and hence all input services availed by it are exclusively for providing taxable output services. Since the entire services are provided to overseas customers, CENVAT credit of service tax paid on such services is admissible. VI. Courier Service: - The c .....

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e at the time of filing of the refund claims. The service tax registration certificate clearly mentions pan based registration number of the vendor. Vll. Chartered Accountant Services - These are the expenses incurred for certain advisory and certification services pertaining to the output services provided by us. It is submitted that the chartered accountant services are specifically covered under the inclusive part of the definition of input service. Vlll. Commercial Training & Coaching Se .....

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een used only in respect of the computerized data processing services rendered by the Appellant which are exported. The Appellant has paid Service Tax on amount paid to TPSL, U.K. as a recipient of services under reverse charge mechanism as the said foreign service provider does not have any office in India, The Appellant has, as a recipient of services, registered themselves and paid service tax on this Manpower Recruitment, Business Support service and Commercial Training & Coaching Servic .....

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activities are critical for the motivation, engagement and retention of our employees. The Appellant submits that in a technology driven industry it is imperative that the employees are constantly motivated to ensure they continuously keep up their high performance. Such activities are also essential for team building and occasional get together. It also helps to keep attrition level under control. - Further, under our global service agreements with our customers we are under an obligation to e .....

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t and retention of the employees and hence, qualify as input services as are used for activities relating to business. X. Erection, Commissioning Installation - The Appellant have incurred expenses in connection with installation charges of fire alarm system and public addressable system in office premises from where output services are exported. These expenses are incurred in connection with the regular up-gradation and repair and maintenance work of the office equipment, which are required to .....

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be impossible for us to provide services without use of information technology. Considering the importance of information technology to our business, it is very important that we maintain our office premises, computer and office equipment so as to provide services on a continuous basis. XI. General Insurance Service For Employees - The Appellant has taken a Group Health Insurance policy, Group personal accident and Group mediclaim policy for employees from Future Generali India Insurance Company .....

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een availed on the said service. For Office Assets - These are expense incurred for policy for loss of Cash in transit from Bank & Fire & Burglary policy for Assets Future Generali India Insurance Company Limited. We have taken insurance cover for Office Assets including Cash lying in safe box. In the day to day operations of our business, we are required to keep cash up to ₹ 50,000/- approx. Further, we also withdraw & then carry cash from the Bank premises to our Office premi .....

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resources are the key resources for any KPO/BPO and their wellbeing is very essential for the provision of output service and for the safety and welfare of the employees of the company. - Further, the said CENVAT credit has been claimed up to 31/03/2011 only and after 01/04/2011 due to specific exclusion from the definition of Input Service, no CENVAT credit has been availed on the said service Xlll. Interior Decorator -The Appellant incurred expenses are in connection renovation and alteration .....

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towards bulk SMS services. This service is used by Appellant to issue immediate alerts, updates or messages to employees / roaming employees about emergencies and critical situations and to ensure that output service is provided efficiently. Since our office run on 24 x 7 basis and as entire services are provided to overseas customers, CENVAT credit of service tax paid on such services is admissible. XV. Legal Service - These expenses are in connection with certain legal / professional advice r .....

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definition of input service. XVI. Management, Maintenance & Repairs Service - The Appellant have incurred expenses in connection with repairing of meeting room table, chairs, storage units and providing and fixing storage and filing cabinets for office, AMC for Computer Servers, Printers, Scanners and painting of office premises. These expenses are incurred in connection with the regular maintenance work of the office premises, which are required to enable us to provide the output services. .....

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services for running the business pertaining to the output services provided by us. This service has direct nexus and is integrally connected with the output service undertaken by us. XVIII. Manpower Recruitment & Supply Agency Service - Trinity Processing Services Ltd, UK (TPSL) has provided services for personnel employed in UK for services in the areas of premium processing and policy processing to the Appellant. In this connection, TPSL, U.K. provides services from time to time to the A .....

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provide output services. -The Appellant has filed copies of G.A.R.7 challan of Service Tax as a recipient of services under reverse charge mechanism and copy of Invoice and Bank Statement evidencing the payment, along with refund claim. XIX. Pandal & Shamiana Service - These services are in relation to employee welfare activities. Such activities are critical for the motivation, engagement and retention of our employees. The Appellant submits that in a technology driven industry it is imper .....

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t managers. Given this, such expenses are essentially for services used in providing output services exported as it would not be possible for us to provide output services without trained and skilled people. XX. Renting of Immovable Property Service Rent and Amenities/ Facilities - The premises from which we operate and carry out business is taken on lease from Godrej and Boyce Mfg. Co. at Vikhroli, Akruti SMC Joint Venture at Thane and L&T Ltd at Powai under Leave and Licence Agreement. We .....

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nditioning plant, utility services provided by Municipal Corporation and other such services provided during the term of agreement, maintenance of the Electrical system, maintenance of Plumbing system, Operation and maintenance of all the pumps, Operation of fire-fighting system, Operation of sewage treatment plant and maintenance, Garbage and waste management, Water tank cleaning. The aforesaid charges are included in maintenance charges which are in the nature of Renting of Property Service an .....

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premises, which is evident from Appellant's ST-2 Certificate. Hence Renting of Immovable Property qualifies as input services. - The premises from which Appellant operate are taken on rent from Godrej & Boyce Mfg. Co. who charge us rent along with service tax. Godrej & Boyce Mfg. Co. Ltd supplies us clean water for use in office premises from where we provide output services. As the premises belong to Godrej & Boyce Mfg. Co, Ltd., they supply us clean water for use in office prem .....

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tes which we have to provide to our employees to ensure that output service is provided efficiently. - Further, the said CENVAT credit has been claimed up to 31/03/2011 only and after 01/04/2011 due to specific exclusion from the definition of Input Service, no CENVAT credit has been availed on the said service. XXII. Online Information & Database Service - The Appellant had engaged the services of M/s. Legalpundits International Services Pvt. Ltd. in relation to certain advisory and consult .....

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ation of Leave and License agreement of Office premises used for providing output services exported. This expense is incurred in relation to business operations and is specifically covered under Rule 6(5) of CC Rules, 2004 and hence, eligible for availment of CENVAT Credit and therefore, also for refund. XXIV. Testing Inspection & Cetification Service - The Appellant had engaged the services of M/s. Geo Chem Laboratories Pvt. Ltd. for testing of water supplied in the office premises. Its leg .....

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rred in connection with the regular maintenance work of the office premises, which are required to enable us to output. services. - The repairs of the premises of output services provider or an office relating to such premises is specifically covered under the inclusive part of the definition of input service. On going through nature of services and use thereof as mentioned above, I find that appellants being engaged in providing output services namely Business Auxiliary Services, Online Informa .....

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