2022 (1) TMI 956
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.... appellant under rule 5 of the CENVAT Credit Rules, 2004 [CENVAT Rules ] out of the amount of Rs. 72,84,585/- that was claimed by the appellant. It is the denial for the balance amount of Rs. 68,02,503/- towards refund that has led to the filing of this appeal before the Tribunal. 2. The appellant registered itself with the Department under the taxable category of "consultancy engineering services" defined under section 65(31) of the Finance Act, 1994 [the Finance Act] and made taxable under section 65(105)(g) of the Finance Act. The appellant exported consultancy engineering services to various overseas clients, including M/s. Wasco Engineering Technology PTE Limited, Singapore [Wasco Engineering] for whom the services were provided to M/s. Cairn India Limited [Cairn India] situated at Barmer in Rajasthan for and on behalf of Wasco Engineering. 3. The appellant filed three refund claims on quarterly basis on the export of consultancy engineering services under rule 5 of the CENVAT Rules and the claims are as follows: S.No. Impugned Period Date of refund Refund claim amount (Rs.) 1. July to September 2014 July 9, 2015 10,24,548/- 2. October to December 2014 ....
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....; 9. Bank realization Certificates are not submitted ? You are therefore hereby requested to be present in person or through your authorised representative at the address given above on the date and time fixed for personal hearing alongwith all the papers and facts on which relied upon and which is relevant to above said refund claim (submitted the documents/facts separately for above each refund claim). If you or your authorized representative fails to attend the same, it will be presumed that you do not have anything more to say in the matter and these refund claim would be decided on the basis of available records without giving further opportunity." 5. The appellant filed a detailed reply dated 09.12.2015 to each of the nine points noted in the deficiency memo and the reply is also reproduced below: "Sir, Please refer your letter dated 4th December 2015 in respect of our service tax refund claim filed for the quarter 2, 3 and 4 of 2014-15. We are submitting the point wise reply to your observations as follows: 1. You have claimed to export services to M/s Cairn India Ltd., please give the location of the project where the services have been p....
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....t services pertain to the export of services, which is explained in the enclosed schedule. Some of the services are common service for the company. The proportionate formula for the input credit is applied on all the services to reduce the input credit proportionate to the credit which may belong to the domestic services. 6. You have late filed most of the refund claim. The refund claim to be made before the expiry of the period specified under section 11B of Central Excise Act, 1944 which is the period of one year from the date of export. We have filed all the claims within one year of the date of export and hence we submit to your goodself that the claim be admissible and within the time limit. 7. The Cenvat credit balances are not co-related with the ST-3 and with refund claim application ? please explain. At one place, there is an inadvertent typing mistake in the closing balance of cenvat credit in our refund application. The balance in ST-3 is correct and the mistake does not affect out claim since the credit balance as per ST-3 is also higher than the refund claim. 8. Co-relation Statement i.e. amount of Export Invoice and BRCs in perform as under, may please ....
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....endered the order bad in law were rejected by the Commissioner (Appeals). However, the contention of the appellant that it was entitled for interest on the amount of refund sanctioned by the Assistant Commissioner was remitted to the adjudicating authority. The relevant portion of the order passed by the Commissioner (Appeals) is reproduced below: "As discussed above, I find that Wasco has entered into a contract with Cairn India Limited ("Cairn") for the inland transportation, installation and commissioning of the Electrical Power House ("Main Contract Scope of Work") for Magalam Polymer Project for Cairn's operations in RJ-ON-90/1 Block, and Wasco had provided subcontract, specific parts of the Main Contract Scope of Work to Ozone. The scope is for the Services to be performed on 15 nos. of Electrical Power House, for Magalam Polymer Project for Cairn India Limited operations in RJ-ON-90/1 Block, Barmer, Rajasthan, India. The conditions laid down in provisions of Rule3 of Export of Services Rules, 2005 read with Rule 6A. of the Service Tax Rules 1994 have not been fulfilled. As per Rule 6A of the Service Tax Rules 1994, the provision of any service provided or agreed....
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.... [the 2012 Rules]; iii. Merely because the end user of the service exported to foreign client is located in India cannot be made a ground to hold that export of services had not taken place. In support of this contention reliance has been placed on the decisions of the Tribunal in Gap International Sourcing (India) Pvt Ltd. vs. Commr. of S.T., Delhi [2015 (37) S.T.R. 757 (Tri. - Del.) ]; Paul Merchants Ltd. vs. Commissioner of C. Ex. Chandigarh [2013 (29) S.T.R. 257 (Tri. - Del.)]; and Microsoft Corporation (I) (P) Ltd. vs. Commr. of S.T., New Delhi [2014 (36) S.T.R. 766 (Tri. - Del.)]; and iv. The appellant would also be entitled to interest if it is held that the appellant is entitled to refund of Rs. 68,02,513/-. In support of this contention reliance has been placed on the decision of the Supreme Court in Ranbaxy Laboratories Ltd. vs. Union of India [2011 (273) E.L.T. 3 (S.C.)]. 10. Shri Anup K. Thapliyal, learned authorized representative appearing for the Department has, however, supported the impugned order and made the following submissions: i. The finding recorded by the Commissioner (Appeals) that the appellant had provided services to Cairn India situated....
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....Work as set out in this Agreement and its exhibits, appendices, schedules, annexures and attachments ("Services"), and D. Ozone recognizes that the timely performance of such Services comprise a vital portion of the Main Contract Scope of Work and agrees to perform the Services on a call out basis, in accordance with the terms and conditions as set forth herein, and E. The parties agree that this Contract shall be governed and construed as a back-to-back contract with the Main Contract (as defined hereunder) and Ozone accepts that the terms and conditions of the Main Contract shall apply fully to this Contract, except as specifically identified herein. NOW THEREFORE IT IS HEREBY AGREED as follows: 1. Ozone agrees to perform the Services in accordance with the terms and conditions of this Contract and, in consideration of the due performance of the Services and fulfillment of other obligations under the Contract, Wasco agrees to pay Ozone according to the terms and conditions herein contained. ******** 8. This Contract shall remain in force for a period of 2 years from the Effective Data ("Term") and Wasco may at any time during the term of this Contract issue a ca....
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....act and/or the Contract is extended beyond the date referred to above for any reason. ******** 13. Ozone shall invoice Wasco in accordance with Annexure 5 (Payment Schedule). For the purposes of Clause 17 (Payment) of Schedule I (General Conditions of Contract), Wasco shall make payment of a correct invoice within 30 days of receipt to Ozone's nominated bank account. For this purpose Ozone shall submit details pertaining to (1) Bank Name, (2) Bank Account No., (3) Branch Address, and (4) SWIFT code to facilitate Wasco making the payment. Ozone shall also ensure the submission of invoice containing all details along with other documents, as per requirement of Clause 17 (Payment) of Schedule I (General Conditions of Contract). ********" 14. A perusal of the aforesaid Agreement clearly reveals that it has been executed between the appellant and Wasco Engineering and that Wasco Engineering had entered into a contract with Cairn India for the inland transportation, installation and commissioning of the electrical power house in Rajasthan. The appellant had agreed to perform the services in accordance with the terms and conditions of the contract and was to receive payment from W....
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....f Provision of Services Rules, 2012" by Notification No. 28/2012-ST dated 20.06.2012. These 2012 Rules were in supersession of the Export of Services Rule, 2005 that had been notified by Notification No. 9/2005-ST dated 03.03.2005. Rule 3 of the 2012 Rules deals with place of provision generally and it provides that the place of provision of a service shall be the location of the recipient of service. "Location of the service receiver" has been defined in the section 2(i) of the 2012 Rules and the relevant portion is reproduced below: "(i) "location of the service receiver" means:- (a) where the recipient of service has obtained a single registration, whether centralized or otherwise, the premises for which such registration has been obtained; (b) where the recipient of service is not covered under sub-clause (a): (i) the location of his business establishment; or (ii) where services are used at a place other than the business establishment, that is to say, a fixed establishment elsewhere, the location of such establishment; or (iii) where services are used at more than one establishment, whether business or fixed, the establishment most directly concerned with th....
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....A of the Service Tax Rules provides amongst others, that the provision of any service provided or agreed to be provided shall be treated as export of service when the recipient of service is located outside India and the place of provision of the service is outside India. The 2012 Rules dealing with place of provision of services in rule 3 provides that the place of provision of a service shall be the location of the recipient of service. The location of the service recipient has been defined in rule 2(i) of the 2012 Rules. The business establishment of Wasco Engineering is in Singapore and it has received the services from the appellant, though, under the Agreement the appellant was to provide the service within India for and on behalf of Wasco Engineering. The finding recorded by the Commissioner (Appeals) is, therefore, not on a correct interpretation of the Service Tax Rules and the 2012 Rules. 25. In this connection it would be useful to refer to the decision of the Tribunal in Gap International Sourcing (India). The appellant therein had entered into a contract with M/s. Gap U.S.A. for rendering various services for export of the purchased products out of India. The Departm....
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....tion of the services in question has to be treated abroad. The destination has to be decided on the basis of the place of consumption, not the place of performance of service, in the case of this service." 28. It cannot, therefore, be doubted that the consultancy engineering services provided by the appellant to Wasco Engineering would qualify as export of service and the findings to the contrary recorded by the Commissioner (Appeals) cannot be sustained. 29. The contention of the learned counsel appearing for the appellant that it was obligatory on the Department to issue a show cause notice to the person filing refund claims if it proposed to reject the claim also has substance. 30. In the present case, upon filing of the refund claims, only a deficiency memo was issued to the appellant requiring the appellant to appear on a particular date and produce the required documents indicated in the memo to substantiate the claim. What information was required to be provided by the appellant has been stated in the deficiency memo and they relate to the location of the project where the services were provided by the appellant, copy of the Agreement with the service receiver and....