TaxTMI 
TaxTMI 
2024 (10) TMI 616
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....GST/D- I/2018-19 dated 15.10.2018 678360/- 04/2014 to 06/2014 3. ST/70016/ 2021 NOI-EXCUS-001-APP- 1645-19-20 dated 17.03.2020 74/R/AC/ CGST/D-I 19 dated 23.08.201 210884/- 10/2012 to 12/2012 4. ST/70017/ 2021 NOI-EXCUS-001-APP- 1646-19-20 dated 18.03.2020 63/R/AC/CGST/ D-I/2018-19 dated 09.08.2018 943100/- 01/2012 to 03/2012 5. ST/70018/ 2021 NOI-EXCUS-001-APP- 1647-19-20 dated 18.03.2020 87/R/AC/CGST/ D-I/2018-19 dated 12.09.2018 630542/- 01/2014 to 03/2014 1.2 By the impugned order Commissioner (Appeals) have rejected/partially allowed the appeals filed by the appellant, against the partial rejection of refund claims filed by the appellant under the Rule 5 of CENVAT Credit Rules, 2004. 1.3 As the issues are identical in nature I am taking up the issue for consideration first and in light of the decisions the appeals will be decided subsequently. 2.1 Appellant is an STPI unit having centralized service tax registration for providing the services classifiable under the category of Information Technology Software Services, Business Auxiliary Service and Management Consulta....
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....t address mentioned in invoices; Invoice were in name of unregistered premises; Invoices pertain to service which do not have any nexus with the output service rendered by the Appellant namely:- Works contract service; Management, maintenance or repair services Telecommunications services Hospitality services Manpower recruitment services Membership fees Credit of service tax paid under reverse charge in July, 2014 cannot be claimed during Apr-June, 2014 quarter. Hence, refund of Rs. 6,03,561/- (out of total refund of Rs. 6,78,360/-) has been denied; 4.3 On the issues of denial of credit for the reason that invoices do not contain proper details such as address etc. it is relevant to note that Board has vide Circular No.120/01/2010-ST dated 19.01.2010 as referred as follows:- "3.4 Incomplete invoices [para 2(e) above]: In case of incomplete invoices, the department should take a liberal view in view of various judicial pronouncements by Courts. It had earlier been prescribed in circular No.106/09/2008-ST dated 11.12.2008 that the invoices/challans/bills should be comple....
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....l Economic Zone, Plot No 20 & 21 Sector 135 Noida, Gautam Budha Nagar. Address of the premises of office paying service tax under centralized billing or centralized accounting under sub-rule (2) and (3A) of rule 4 of Service Tax Rules 1994. Steria (India) Ltd, Seawood Special Economic Zone Building No 4 Plot No 20 & 21, Sector 135 Noida, Gautam Budha Nagar." Since appellant have centralized registration at NOIDA, the input credit in respect of the services received at Pune and Chennai gets reflected in the common cenvat credit account maintained at NOIDA and in the ST-3 return filed in NOIDA. By taking the credit against the invoices addressed to their premises at Pune and Chennai appellant have not contravened any provision of the Cenvat Credit Rules, 2004 for which the said credit could have been denied. 4.6 The next ground on which the refund claim has been denied/modified is that invoices have been issued in unregistered premises. This issue has also been settled by the Tribunal in various decisions referred to by the counsel for the appellant namely as under :- Ribbit Studios [(2023) 6 Centax 182 (Tri.-Bom)] ABM Knowl....
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....Rules, 2004. In my view the Commissioner (Appeals)/Adjudicating Authority has misdirected himself by undertaking such exercise while adjudging the refund claim filed in terms of Rule 5. In the case of Accelya Kale Solutions Ltd. v. Commissioner of Central Goods and Services Tax and Central Excise, Mumbai [2018-TIOL-2452- CESTAT-MUM = 2019 (369) E.L.T. 803 (Tri. - Mumbai]. Tribunal observed, as under :- "3. Rule 5 of Cenvat Credit Rules, 2004, was substituted vide Notification No. 18/2012-C.E. (N.T.), dated 17-3-2012, with effect from 1-4-2012. The said substituted rule has prescribed the formula for claiming refund of service tax by the service provider. Under such amended rule in vogue, there is no requirement of satisfying the nexus between the input services and the output service provided by the service provider. Consequent upon substitution of the said Rule in the Union Budget - 2012, the Tax Research Unit (TRU) of CBEC vide letter dated 16-3-2012 has clarified as under :- "F.1. Simplified scheme for refunds : 1. A simplified scheme for refunds is being introduced by substituting the entire Rule 5 of Cenvat Credit Rules, 2004. The new scheme do....
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.... B. Microsoft Global Services Center (I) Pvt. Ltd. [2021 (44)G.S.T.L. 264 (Tri. - Hyd.)] "8. Rule 3(1) ibid is the enabling provision, which entitles a manufacturer or provider of output service for availment of Cenvat credit of various duties and service tax paid on the inputs/input services. The manner of utilisation of such credit is contained in sub-rule(4) of Rule 3 ibid. In the event, where the Cenvat credit has been wrongly taken or utilised, Rule 14 ibid mandates for recovery of such irregularly availed credit from the service provider, in the manner prescribed under Section 73 of the Finance Act, 1994. The basic requirement for effecting recovery of the Cenvat credit under the said statutory provision is for initiation of show cause proceedings within the stipulated timeframe and thereafter, for adjudication of the dispute arising therefrom. In the present case, it is an undisputed fact on record that the department had not proceeded against the appellant for effecting recovery of the allegedly availed irregular Cenvat credit, by taking recourse to Rule 14 ibid read with Section 73 ibid. On the other hand, the department had raised the issue of n....
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....establishment of nexus or correlation between exports and input services used in such exports may not be insisted upon and the refund claim be decided on the ratio of the export turnover to total turnover. The relevant paragraph in the letter dated 16-3-2012 (supra) is extracted herein below : "F. 1. Simplified scheme for refunds : 1. A simplified scheme for refunds is being introduced by substituting the entire Rule 5 of CCR, 2004. The new scheme does not require the kind of correlation that is needed at present between exports and input services used in such exports. Duties or taxes paid on any goods or services that qualify as inputs or input services will be entitled to be refunded in the ratio of the export turnover to total turnover". 8.2 On a conjoint reading of the statutory provisions and the notifications issued by the Central Government from time to time, it transpires that input services may not necessarily be used directly in provision of the output service and use of such services 'in or in relation to' also meet the requirement of Rule 5 ibid for the purpose of refund benefit. While interpreting the expression 'in relation to' used in the s....
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....ngs on the issues involved I take up individual appeal for consideration. Service Tax Appeal No.70016 of 2020 4.10 As per para 5.1 of the impugned order following issues have been flagged for consideration: Cenvat Credit is sought to be denied on following input services alleging that they do not qualify as input services in terms of Rule 2 (l) and Rule 9 of CENVAT credit Rules; Courier Service Rs 10475 Advertising Services Rs 30400 Rent a Cab Rs 691 Withdrawn Works Contract Rs 2169 Hospitality Rs 14137 Withdrawn Rs 6791 Management Maintenance Rs 144620 Repair 4.11 By the impugned order CENVAT credit has been held admissible in respect of courier service, advertising service, Landscaping service , work contract services and has been denied on the Hospitality services and Management maintenance and Repair services. 4.12 So the issue that remains for consideration in this appeal is only in respect of Hospitality Services and Management maintenance and Repair Services. Also in respect of Hospitality Services appellant has withdrawn the claim to the extent of Rs 6791/- and hence the issue for consideration is in....
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....co Electrical Pvt. Limited. v. CCE - 2010 (18) S.T.R. 177 (Tri.), CCE v. Mundra Port & Special Economic Zone Limited - 2011 (21) S.T.R. 361 (Guj.), Ambalal Sarabhai - TA No. 433 of 2010 (Guj. HC), Rajratan Global Wires Limited. v. CCE - 2011 (21) S.T.R. 383 (Tri.), CCE, Guntur v. Hindustan Coca- cola Beverages Pvt. Limited - 2010 (18) S.T.R. 500 (Tri.-Bang.), the credit of service tax paid on Advertising Agency Services, Business Auxiliary Services, Business Support Services (in the case of this assessee, it is Advertising Agency Service), Management and Consultancy Services, Online Information and data base Access Service, Port service, Maintenance and Repair Service, Consulting Engineer's service, Security Agency Service and Storage and Warehousing credit is admissible." In view of the above I do not find any merits in impugned order denying the credit in respect of these services. Service Tax Appeal No.70014 of 2020 4.14 As per para 5.1 of the impugned order following issues have been flagged for consideration: The appellant has availed input credit on some services which are not used for authorized operation and some of the services not covered under input ser....
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....to meet clients and hence, directly connected with the rendering export of output service. The appellant has also submitted copies of sample input service invoices along with contemporary copies of internal approval for availing such services to demonstrate that the said services were availed only for business purpose. In the circumstances, I hold that the denial of the refund is therefore not justifiable. Iii. Chartered Accountant's Services The refund of the credit on these services has been disallowed by lower authority on the grounds that no connectivity has been established to conclude that the said services are used in relation to export. The appellant has adverted that these services were received by them in connection with their audit and issue of certificate by practicing Chartered Accountant and that these services will fall under the ambit of activities like accounting and audit which form part of the inclusive portion of the definition of 'input service' at Rules 2(l) of the Cenvat Credit Rules, 2004. I find merit in the submissions of the appellant and in consequence, I hold that the denial of the refund for this input servi....
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....ess purpose. In the circumstances, I hold that the denial of the refund for this input service is not justifiable. vii. Information Technology Software Services. The lower authority while conceding that the assessee is eligible for refund of the credit on this service, has however disallowed an amount of Rs. 4,635/- without assigning any reason thereof. The appellant has adverted that the impugned credit amount has been incurred by them on the invoices raised by M/s. TenXLabs Technologies Pvt. Ltd. towards 'hosting charges' availed by them to access web based application and that the same are directly related to the export of their output service. I find merit in the above submissions of the appellant and I hold that the denial of the refund for this input service is not justifiable. viii. Management, Maintenance and Repair Services The lower authority has disallowed refund pertaining to premises related to maintenance, Xerox machine maintenance, Fire alarm maintenance etc. on the ground that same do not impact the quality of the output service. The appellant has adverted that these services are consumed essentially in ....
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....rent of fitouts and has also held that input services should have been used for providing the output services and input services though used by the service provider would render themselves ineligible if their consumption is not in relation to or not having nexus with the output service. On appeal, the appellate authority has inter alia upheld that part of the order of the lower authority disallowing the refund of Cenvat credit in respect of input services pertaining to rent of fitouts, holding that the same does not form part of immovable property service. Before this Tribunal, the appellant has contended that the fitouts rent are towards the basic furniture and fixtures provided by the premises owner along with the premises as part of the renting services; that this is an essential service without which the appellant cannot export services; that any view that no furniture and fixtures are required for rendering the output services is devoid of merit. In the instant case, I find that the appellants were a provider of output service under the category of Information Technology from their premises at Madhapur, Hyderabad. It is not disputed that the said output servi....
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....ement or sales promotion, which finds place in the inclusive portion of the definition of input service. I, therefore, hold that the appellants are eligible for the refund of credit on this service. xiv. Club or Association Services I find that services such as this provided by a club are excluded from the ambit of input service by virtue of Rule 2(l)(C) of the Cenvat Credit Rules, 2004. However in this instance, it has been clarified by the appellant that these services are with reference to the membership fees paid to the Indian Semiconductor Association which represent the interest and concern of appellant and are not availed for personal use or consumption of the employee. This being the case, I hold that this input service is used for the furtherance of the output service provided by the appellant. xv. Legal Consultancy Services Like Chartered Accountant services, these are also essential services which are required by service providers or manufacturers for conducting their business and hence have a direct nexus. In any case, the said service finds place in the inclusive portion of the definition of input service. 3. In view of the ....
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.... "9. The second ground raised by the ld. AR is that the appellant is not eligible to take credit of the service tax which was paid belatedly under reverse charge mechanism, for two reasons: Firstly, that such service tax does not relate to the quarter for which the refund claim is filed. This issue is clarified in Circular No. 120/01/2010-S.T., dated 19-1- 2010. The Tribunal in the case of M/s. Hritik Exim v. CCE, Hyderabad-IV vide Final Order No. A/31188/2016, dated 26-10-2016 has considered the said issue and held in favour of assessee. The relevant portion of the Final Order is reproduced as under: "5. On behalf of the department, the Ld. AR Shri P.S. Reddy reiterated the findings in the Impugned Order. He submitted that the credit was availed on the basis of the invoices for foreign agent commission service dated 1-3-2010, 10-11-2010 and 25-3-2011. That the period of refund claim pertains to February, 2012 & March, 2012. That as the invoices are for past period, the appellant is not entitled to the refund. 6. With regard to the issue whether the appellant is eligible for refund in respect of credit availed for earlier period, the D.O.F. No. 334/1/2010-TR....
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....rospective changes are contained in Notification No. 7/2010-Central Excise (Non-Tariff), dated 27-2-2010. Both these documents may be carefully read together for appreciating the full impact of the changes. The salient features of these changes are as follows: Retrospective changes effected from 14-3-2006 (i.e. from the date of issue of notification) (1) The words "in relation to" have been added in main condition (a) of the Notification. (2) The word "in" contained in main condition (b) of the said Notification has been replaced with "for". The above two changes ensure that the provisions of the refund notification and the CENVAT Credit Rules are aligned and that refund is granted on all goods or services on which CENVAT can be claimed by the exporter of goods or services. (3) The illustration given in condition 5 of the Appendix to the Notification has been deleted. This ensures that refund of CENVAT credit which has been availed in the period prior to the quarter/period for which the refund has been claimed is also eligible for refund. The refund claims should be calculated only on the basis of the ratio of the export turnover to the ....
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....f 2020 4.24 As per para 5.1 of the impugned order following issues have been flagged for consideration: Input Service tax credit has been denied for the reason that the said credit was not admissible to the appellant in terms Rule 2(l) and Rule 9 of CENVAT Credit Rules, 2004 4.25 In view of the observations made in para 4.3 to 4.5 and with regards to admissibility of credit in respect of the disputed services, namely Work Contract Services, Management, Maintenance & Repair Services, Telecommunication Services, Cleaning Services, Manpower Recruitment Services, Security Services, Mandap keeper Services and Hospitality I do not find any merits in the findings recorded by the impugned order on this issue. Further I also observe that impugned order is totally non speaking in nature and does not make any analysis in respect of the services in dispute. In absence of any categorical finding recorded I am constrained to observe that in respect of the appeal No same Commissioner (Appeal) has held that Cenvat Credit is admissible in respect of most of the disputed services. 4.26 Appellant has contested the charge made in the show cause notice for demanding interest and imposition ....