TMI Blog2023 (6) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... sentative for the Revenue in COMMISSIONER OF CENTRAL EXCISE, COIMBATORE VERSUS SUTHAM NYLOCOTS [ 2014 (11) TMI 496 - MADRAS HIGH COURT ] is distinguishable on facts as the decision was rendered prior to the coming into effect of the CENVAT Credit Rules, 2004 and our view is also supported by the decisions of the Hon ble Madras High Court in the cases of THE COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI VERSUS BNP PARIBAS SUNDARAM GLOBAL SECURITIES OPERATIONS PVT LTD. [ 2018 (6) TMI 676 - MADRAS HIGH COURT ] and Commissioner of G.S.T. and Central Excise, Chennai v. Pay Pal India Pvt. Ltd. [ 2020 (7) TMI 321 - MADRAS HIGH COURT ] relied upon by the learned Advocate for the respondent, wherein it has been held that Rule 5 of the CENVAT Credit Rules, 2004 has not mandated registration as a condition for refund of accumulated credit. Disallowance of credit on Authorized Service Station, CHA Service, Advertising Service and Real Estate Agent Service - HELD THAT:- Disallowing the credit on the aforesaid services is not sustainable as the definition of input service is inclusive and as long as it is used in or in relation to the business, the assessee is eligible for tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 556/- 49,38,320/- 2.1 Briefly stated the facts in these appeals are that M/s. Saipem India Projects Limited, Chennai, the respondent herein, are holders of Service Tax Registration under the category of Consulting Engineer Service, Commercial Training and Coaching, Business Support Service and Information Technology Software Service. The respondent is mainly engaged in providing engineering and allied services in relation to projects in oil and gas, petrochemicals and refineries, both domestic and international. It appears that their main service is Consulting Engineer relating to offshore or onshore allied services and most of the services provided are in the nature of export of service, though the unit is not a 100% Export Oriented Unit (EOU). It was also informed that they are not registered with the Software Technology Parks of India (STPI). 2.2 The respondents had filed three refund claims: Rs.66,57,953/- for the period from July 2009 to September 2009, Rs.85,27,600/- for the period from October 2009 to December 2009 and Rs.40,85,690/- for the period from January 2010 to March 2010, relating to accumulated input credit under Rule 5 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and accordingly, sanctioned a refund of Rs.17,15,556/- out of the total claim of Rs.66,57,953/- for the said period by applying the formula prescribed in the said Notification. 4. Being aggrieved, M/s. Saipem India Projects Ltd. filed appeals before the Commissioner of Central Excise (Appeals), Nungambakkam, Chennai, who allowed their appeals deciding the following issues: - (a) The ineligibility of refund prior to registration (b) Refund rejected in respect of certain services as the same are not eligible input services (c) Proportionate credit was arrived by restricting the formula to the period after registration. 5.1 The lower appellate authority has placed reliance on the decision of the Hon ble high Court of Karnataka in the case of M/s. mPortal India Wireless Solutions P. Ltd. v. Commissioner of Service Tax, Bangalore [2012 (27) S.T.R. 134 (Kar.)] wherein it was held that Service Tax Registration is not mandatory for refund of accumulated CENVAT Credit of Service Tax paid on input services used for export of services. 5.2 On the issue of eligibility of certain input services which are allegedly not related to output service, reliance has been placed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e means any service used by a provider of taxable service for providing an output service . So, the use of any taxable service must be directly connected with the provision of the output service and not indirectly. Thus, the proper test to decide as to whether a particular service can be treated as an input service for a particular output service is to see whether, but for the use of the said input service, the said output service could not practically be provided in the manner in which it is required to be provided. It is this nexus that has been emphasized by the CESTAT, South Zonal Bench, Bangalore in its Final Order Nos. 590 to 601/2010 dated 19.03.2010 holding that the input service should have direct nexus to the rendering of output service, following the judgement of the Hon ble Supreme Court in the case of M/s. Maruti Suzuki Ltd. v. Commissioner of Central Excise, Delhi-III [2009 (240) E.L.T. 641 (S.C.)]. The lower appellate authority has thus erred in holding that all services used in relation to the business activity of the assessee would be eligible input services for availment of CENVAT Credit. 7. During the hearing before the Tribunal, learned Authorized Rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd. v. Commissioner of C.G.S.T. [2023 (3) TMI 130 CESTAT, Mumbai] Commissioner of Service Tax, Delhi v. Convergys India Pvt. Ltd. [2009 (16) S.T.R. 198 (Tri. Del) affirmed in 2010 (20) S.T.R. 166 (P H)] 9. Heard both sides and perused the records as available in the appeals. 10.1 We find that the learned lower appellate authority has relied upon the decision in the case of M/s. mPortal India Wireless Solutions P. Ltd. v. Commissioner of Service Tax, Bangalore [2012 (27) S.T.R. 134 (Kar.)] on the issue of allowing accumulated CENVAT Credit for refund prior to registration. The relevant portion of the above decision is extracted below: - 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 entitled to the benefit of refund, the three authorities committed a serious error in rejecting the claim fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowable only if the said services are used in relation to the manufacture of final products. That argument cannot be accepted because unlike the definition of input, which is restricted to the inputs used directly or indirectly in or in relation to the manufacture of final products, the definition of input service not only means services used directly or indirectly in or in relation to manufacture of final products, but also includes services used in relation to the business of manufacturing the final products. Therefore, while interpreting the words used in the definition of input service , the ratio laid down by the Apex Court in the context of the definition of input alone would apply and not the judgment in its entirety. In other words, by applying the ratio laid down by the Apex Court in the case of Maruti Suzuki Ltd. (supra), it cannot be said that the definition of input service is restricted to the services used in relation to the manufacture of final products, because the definition of input service is wider than the definition of input . 34. Therefore, the definition of input service read as a whole makes it clear that the said definition not only covers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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