AI Drafter 
TaxTMI 
TaxTMI 
2016 (2) TMI 313
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....ion technology and information technology enabled services (IT/ITeS) from their registered unit. I addition to exports, a minor portion of their business relates to supply of services to their group entities within India. In the process of executing their contracts with clients in India and abroad, the appellant utilizes input services on which CENVAT credit is availed by them. 3. Though they utilise a portion of the available CENVAT credit for discharge of tax liability on services 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 upon the application for refund, the appellant were issued with a show cause notice for rejection of refund claims. The claims having been denied by the Assistant Commissioner of Service Tax, Division-III, Mum....
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....elation 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) STR 410 (Tri. Mumbai) wherein almost identical circumstances, Commissioner (Appeals) had allowed two rejected refund claims against which revenue came up in appeal before the Tribunal. While dismissing the appeal, the Tribunal has pointed out: "6.1. The actual dispute centres around two issues. The first issue is whether the 21 input services is in respect of which refund of credit was claimed can be considered as input services used in providing output service which are exported without payment 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 ....
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....input service will get covered under the definition of input service on which credit is sought. However, we do not agree that part of the service tax credit, on the service of supply of food whose expenditure is gone by the employees, will not be an admissible input service for availment of credit. The permissibility of input 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 admissible under notification No. 5/2006. We note that Revenue's appeal raises a doubt whether the services have actually been used for providing taxable output services. We find no finding of this point in the adjudication order or in the appellate order. This is totally a new ground. There being no doubt expressed whatsoever either in the show cause notice or in the adjudic....
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....f 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 only to the extent of an amount not exceeding 20% of the amount of service tax payable on taxable output service. In the present case, the services provided by the appellant and exported is not a taxable output service inasmuch as software development software service and software consultancy service become taxable only in the Budget 2008. Therefore, the cap of 20% prescribed under Rule 6(3)(c) have no application whatsoever. Therefore, there was no bar on the appellant in availing full credit in 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 se....