TaxTMI 
TaxTMI 
TaxTMI 
2025 (3) TMI 1065
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....85170/2017, ST/85194, 86490, 87558/2018 shall be called hereinafter as Batch-I appeals which have a common issue involved which is related to refund of accumulated cenvat credit under the provisions of Rule 5 of Cenvat Credit Rules, 2004. Remaining appeals shall hereinafter be referred to as Batch-II appeals and are having an issue related to refund of service tax under Section 11B of Central Excise Act, 1944 made applicable to service tax matters through Section 83 of Finance Act, 1994. 2. Brief facts of the case are as follows:- Appellant provides information technology software services to its clients located outside India. Appellant provides the said services under two modules which shall be hereinafter referred to as Model-I and Model-II. The transactions that are under Model-I are not under dispute in the present appeals and, therefore, details of the same are not required because in the case of Model-I, appellant directly enters into contracts with overseas customers for providing information technology software service (ITSS). Appellant raises invoice on overseas customers for entire service rendered and the said transactions are not in dispute in the present appeal. Mode....
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....l-II transactions is Rs.75,26,04,317/-. In respect of Batch-I appeals, the original authority and the first appellate authority have held that service tax paid under reverse charge on services provided by subsidiaries to clients outside India will not qualify as input services for the appellant in India and, therefore, the refund of cenvat credit of Rs.75,26,04,317/- in six orders-in-appeal related to six appeals in Batch-I was denied to the appellant. Aggrieved by the said order, appellant is before this Tribunal in Batch-I appeals. In respect of Batch-II appeals, the original authority in all the six cases has rejected the refund applications. Learned Commissioner (Appeals) has affirmed the said orders by assigning various reasons like the application is premature or if such application is allowed, it will create legal implications. Aggrieved by the said orders, appellant is before this Tribunal in Batch-II appeals. 3. Hearing of these appeals took place on various dates and on various dates, part of the arguments were made by both sides. Therefore, both sides were allowed to make consolidated written submissions on the basis of their arguments made in the court during hearing o....
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....under Section 11B cannot survive, learned counsel has submitted that the Larger Bench in the case of Shree Balaji Warehouse vs. Commissioner of Central Excise & Service Tax, Panchkula reported at 2023 (9) TMI 1478 - CESTAT Chandigarh (LB) held that the decision in ITC Ltd. (supra) is not applicable to service tax matter since service tax return is not assessed by the proper officer unlike the Bill of Entry under the Customs Act, 1962. c. Dealing with the argument of Revenue that the Tribunal's final order No. A/85255-85262/2022 dated 04.03.2022 has decided that the Model-II onsite turnover does not qualify as export of services, learned counsel for the appellant has submitted that there is no discussion or finding about the denial of cenvat credit of tax paid on reverse charge. d. The calculation sheet submitted by Revenue has no bearing on the relief claimed by the appellant in the present appeals since the effect of transfer of cenvat credit to refund receivable general ledger is not considered by the department in the said computation. Along with the said consolidated written submission dated 09.07.2024 appellant has filed original copy of affidavit dated 26.06.2024 filed ....
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....T/86490/ 2018 17,18,91,071 7 ST/88383/ 2018 Apr-17 to Jun 17 PUN-CT-APPII-000- 038-18-19 171,74,52,828 ST/87558/ 2018 8,44,86,170 Sub-total (B) 569,84,26,527 25,63,77,241 Total (A+B) 2068,05,21,894 75,26,04,317 5. Out of the total amount of disputed Cenvat Credit of Rs 75,26,04,317/- denied in the Batch 1 Appeals, the Appellant reversed the Cenvat credit to the extent of Rs 49,62,27,076/- (from October 2014 to September 2016) and transferred in a distinct ledger named 'Refund Receivable General GL-10300024 (Old Software GL-140910)' in its books of accounts. The said amount was not re-availed as Cenvat credit and not transitioned into GST regime. 6. The balance amount of Rs. 25,63,77,241/- for the period October 2016 to June 2017 has not been reversed/debited from Cenvat credit ledger and transferred to the ledger 'Refund Receivable General GL- 10300024 (Old Software GL-140910)'. 7. Therefore, in the Batch I appeals, out of the total amount of disputed Cenvat Credit of Rs 75,26,04,317/, a cash refund to the extent of Rs 49,62,27,076/- only should be granted to the Appellant. 8.1. In Batch-II Appeals, the Appellant filed refu....
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.... refund. b. Batch-I appeals are squarely covered by the final order bearing final order No. A/85255-85262/2022 dated 04.03.2022 of the Tribunal for the past period from July 2012 to March 2014, wherein it was categorically held that onsite component of Model-II service cannot be treated as export of service. It was held by this Tribunal that the appellant's claim that the component of onsite service actually provided by the subsidiary to the overseas client directly under a valid contract between those two legal entities. An input service imported by the appellant is a hollow claim when examined in the light of factual position and that the onsite services were not provided by the appellant to the foreign customers. Therefore, the appeals under Batch-I appeals deserve to be dismissed. c. The onsite service under Model-II cannot be treated as service of export for the purpose of calculating refund under Rule 5 of Cenvat Credit Rules, 2004 where a formula for calculation of admissible refund is provided. The formula is as follows:- "Refund amount = (export turnover of goods + export turnover of services) x CENVAT credit". They have further submitted that onsite services under M....
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....ding company and subsidiary company where the appellant has no role in providing services by their subsidiary to their clients. Appellant has paid service tax on these transactions on reverse charge basis and availed cenvat credit of the same. Contention of Revenue is that those services are provided by subsidiaries and the appellant has nothing to do with them and, therefore, they are not input services for the appellant and, therefore, cenvat credit of service tax paid on the transactions that took place between overseas subsidiaries and their overseas clients does not satisfy the definition of input service under Rule 2(l) of Cenvat Credit Rules, 2004, thereby holding that the authorities below have denied refund of accumulated cenvat credit of such cenvat credit under Rule 5 of Cenvat Credit Rules, 2004. Through six orders-in- appeal dated 11.05.2016, 30.05.2016, 01.12.2016, 05.10.2017, 24.01.2018 and 24.01.2018, learned Commissioner (Appeals) has denied refund of cenvat credit to the appellant to the tune of Rs.75,26,04,317/-. The said cenvat credit is cenvat credit of service tax paid on transactions that completely took place beyond the territorial jurisdiction of India and ....