TaxTMI 
TaxTMI 
2022 (1) TMI 956
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....ellant towards the refund claimed by the 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, 20....
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.... Date of BRC Amount (in Foreign Currency) (in INR) (in Foreign Currency) (in INR) 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 th....
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.... same by the Company. The Cenvat Credit Rules provide that the input credit can be claimed within one year. Therefore claiming the input credit after one or two months should not deny the credit. 5. Most of the Input services are not related to the export of services. Most of the input 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 ty....
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....,513/-. 7. This order passed by the Assistant Commissioner was assailed by the appellant before the Commissioner (Appeals). The contentions advanced on behalf of the appellant that it was also entitled for refund on the services rendered to Wasco Engineering and non issuance of a show cause notice for denying any part of the refund claim had also rendered 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 Hous....
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....contention, reliance has been placed on the decision of the Tribunal in Commissioner of C.EX. & CUS., Aurangabad vs. Sidheshwar SSK Ltd. [2011 (274) E.L.T. 141 (Tri. - Mumbai)]; ii. The "consultancy engineering services" provided by the appellant to Wasco Engineering qualifies as "export of services" in terms of rule 6A of the Service Tax Rules read with rule 3 of the Place of Provision of Services Rules, 2012 [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....
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....nees.) RECITALS Whereas: A. 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 Mangala Polymer Project for Cairn's operations in RJ-ON-90/1 Block, and B. Wasco wishes to subcontract specific parts of the Main Contract Scope of Work to Ozone, and C. Ozone wishes to perform such parts of the Main Contract Scope of 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 THE....
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.... bank guarantee in the sum of 10% of the total price of the respective Call Out Order valid up to expiry of Warranty Period in the form attached as Appendix 4 to Schedule I (General Conditions of Contract) from a bank in Singapore (the "Performance Bank Guarantee"). The Performance Bank Guarantee shall be provided by Ozone promptly following execution of the Contract. If requested by Wasco, Ozone agrees to extend the validity period of the Performance Bank Guarantee or to issue a further Performance Bank Guarantee in the event that there is any delay in the performance of this Contract 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....
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....ndia. 17. The contention of the appellant is that the recipient of service, which is Wasco Engineering, is located outside India and, therefore, the services rendered by the appellant to Wasco Engineering would qualify as "export of services". The Department, however, contends that since the appellant provided services to Cairn India, which is located within India, the services rendered by the appellant would not qualify as "export of services". 18. It needs to be noted that earlier the Central Government made the "Export of Services Rules, 2005" by Notification No. 9/2005-ST, dated 03.03.2005. Subsequently, the Central Government made the "Place of 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 belo....
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....service" would indicate that service means any activity carried out by a person for consideration. 23. A perusal of the Agreement between the appellant and Wasco Engineering shows that the appellant was required to perform the services for which Wasco Engineering was to make the payment to the appellant. There is no flow of consideration from Cairn India to the appellant. 24. This apart, the Agreement for performance of service was executed between Wasco Engineering and the appellant. Wasco Engineering was stated to be a company incorporated in Singapore having its principal place of business at No. 5 Pandan Road. The service was, therefore, required to be provided by the appellant to Wasco Engineering located outside India. Rule 6A 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 l....
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....e provided is Business Auxiliary Service classifiable under Section 65(105)(zzb) read with Section 65(19) of the Finance Act, 2005, and has been provided in relation to business of Western Union located abroad, and the payment for the service has been received in India in convertible foreign currency, the same has to be treated as export of service. It is the person who requested for the service and is liable to make payment for the same who has to be treated as recipient of the service, not the person or persons affected by the performance of the service. Thus, when the person on whose instructions the services in question had been provided by the agents/sub-agents in India and who is liable to make payment for these services, is located abroad, the destination 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 ....