Custom, Excise & Service Tax Tribunal
Adobe Systems India Pvt Ltd vs Ce & Cgst Noida on 26 June, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Service Tax Appeal No.70232 of 2019
(Arising out of Order-in-Appeal No.NOI-EXCUS-001-APP-1613-17-18 dated
12.01.2018 passed by Commissioner (Appeals) Customs & Central Tax,
Noida)
M/s Adobe Systems India Pvt. Ltd., .....Appellant
(Plot No.A-05, Sector-132, Expressway, Noida)
VERSUS
Commissioner of Central Excise &
CGST, Noida ....Respondent
(Noida) APPEARANCE:
Shri Kapil Vaish, Chartered Accountant for the Appellant Shri Manish Raj, Authorized Representative for the Respondent CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.- 70685/2024 DATE OF HEARING : 26.06.2024 DATE OF DECISION : 26.06.2024 P. K. CHOUDHARY:
This appeal has been filed by the Appellant against Order- in-Appeal No.NOI-EXCUS-001-APP-1613-17-18 dated 12.01.2018 passed by Commissioner (Appeals) Customs & Central Tax, Noida.
2. The facts of the case in brief are that the Appellant is engaged in providing taxable services of "Information Technology Service", "Business Auxiliary Services" and "Management Consultant Services". Most of the services are exported by the Appellant. In terms of Rule 5 of Cenvat Credit Rules, 20041 and Notification No.27/2012-CE (NT) dated 18.06.2012, a refund claim for Rs.85 lakhs was filed on 29.06.2016 for the period from October, 2015 to December, 1 CCR, 2004 Service Tax Appeal No.70232 of 2019 2 2015. A Show Cause Notice2 dated 02.12.2016 was issued proposing to reject the claim to the extent of Rs.35,85,453/- on the ground that the Cenvat credit is inadmissible since the services do not fall in the definition of input service, invoices do not bear the Service Tax registration number, invoices do not contain the description of input service etc. Vide Order-in- Original dated 01.02.2017, the jurisdictional Assistant Commissioner sanctioned the refund claim of Rs.53,63,670/- and rejected the refund claim of Rs.31,36,330/- for the reasons stated in SCN. On appeal, the learned Commissioner (Appeals) further granted refund of Rs.8,31,976/- and upheld the rejection of Rs.22,62,381/-. Appellant has filed this appeal challenging the said rejection of Rs.22,62,381/-.
3. The learned Counsel appearing on behalf of the Appellant submitted that the contract with its holding company for export of services is on cost plus 1.5% basis. Therefore, all services availed by the Appellant are directly connected to provision of output service and that there is no dispute on availing service and payment to service provider.
4. He further submitted that in terms of Rule 5 of CCR, 2004, refund of Cenvat credit is allowed on the basis of specified formula. Since, in the present case, entire services are for export, entire Cenvat credit accrued during the relevant period is eligible for refund. It is submitted that while processing the refund claim under Rule 5, the eligibility to the credit should not be allowed to be examined. This is more so when the Appellant's records for the relevant period had been examined and no objection had been taken to the claim for credit. He relied upon the following decisions in support of his submissions: -
(a) Verisign Services India Pvt. Ltd. Vs. Commissioner of Service Tax, Bangalore-1, reported as 2018 (12) G.S.T.L. 161 (Tri. - Bang).
(b) C.N.S. Comnet Solution Pvt. Ltd. Vs. Commissioner of Central Excise & Service Tax, Gurgaon-I reported in 2021 (51) G.S.T.L. 213 (Tri.- Chan.).2
SCN Service Tax Appeal No.70232 of 2019 3
(c) Shree Krishna Paper Mills & Ind Ltd. Vs. Commissioner of Central Excise & Service Tax, Gurgaon reported in 2019 (365) E.L.T. 594 (Tri.-Chan).
5. He also drew our attention to various contracts and invoices available in appeal paper book to contend that the Cenvat credit had correctly been availed. He also drew our attention to the audit report for the period from April, 2014 to June, 2017 wherein no objection had been raised with regard to said credits.
6. Learned Departmental Authorized Representative appearing for the Revenue justified the impugned order and prayed that the appeal filed by the Appellant be dismissed being devoid of any merits.
7. Heard both the sides and perused the appeal records.
8. We find that the Appellant filed refund claim under Rule 5 of CCR, 2004 read with Notification No.27/2012-CE dated 18.06.2012. Rule 5 provides that output services which are exported, without payment of tax, shall be allowed refund of Cenvat credit as per the prescribed formula and subject to the procedure as prescribed in the notification. The Cenvat credit for this purpose means the Cenvat credit availed on inputs or input services by the manufacturer or output service provider. In the present case, the claim for refund has been partially rejected on the ground that service do not fall in the definition of input service or that the invoices are incomplete or that registration number of service provider is not given on the invoice.
9. We note that Rule 14 of Cenvat credit rules prescribes a separate procedure for recovery of Cenvat credit irregularly availed. While processing the refund claim filed under Rule 5 of CCR, 2004, it is not open for the authorities to examine as to whether the Cenvat credit had been correctly availed. In the present case, we find that Excise Audit under EA 2000 had been carried out by the Department and no objection was raised with regard to availment of that credit. We find that this issue has come up for consideration in the case of Verisign Services India Service Tax Appeal No.70232 of 2019 4 Pvt. Ltd.(Supra) wherein Tribunal held that refund claim cannot be denied on the ground that services in question on which Cenvat credit remains unutilised were not input service. Para 7 of the order reads as under :-
"7. Further, I observed that at the time of availment of these services, it was not questioned to the appellant that these are not „input services‟ therefore they are not entitled to avail Cenvat credit. The issue has been raised at the time of filing of refund claim under Rule 5 of Cenvat Credit Rules, 2004 by the appellant. Availment of Cenvat credit cannot be disputed on the later stage. In that circumstances by relying on the decision Technip India Ltd.
- 2017-TIOL-3708-CESTAT-MUM, I hold that refund claim cannot be denied merely on the premise that services in question on which Cenvat credit remained unutilized in Cenvat credit are not „Input Services‟. In view of the above analysis, I hold that appellants are entitled for refund claim filed under Rule 5 of Cenvat Credit Rules, 2004. In the result, the impugned orders are set aside and the appeals are allowed with consequential relief, if any."
10. Similar view has been taken by the Tribunal in the case of CNS Comnet Solution Pvt. Ltd. (Supra). Para 6 of the said order reads as under :-
"It is an admitted fact on record that the appellant has taken the Cenvat credit on rent-a-cab service where the service provider has charged the service tax from them and for the remaining invoices, they have paid the service tax under reverse charge mechanism and availed the Cenvat credit of the same. It is also a fact on record that at the time of availment of the Cenvat credit, it was never disputed that the appellant is not entitled to the Cenvat credit on the service in question. The dispute in the matter is of sanction of refund claim of unutilized Cenvat credit in their account not the issue of availment of the Cenvat credit on the input service, therefore, the Revenue has fell Service Tax Appeal No.70232 of 2019 5 in error and wants to raise the issue of availment of the Cenvat credit while entertaining the refund claim. In case, the appellant had not filed the refund claim, the appellant was entitled of the Cenvat credit which was not objected at the time of availment. In that circumstance, I hold that at the time of entertaining the refund claim, the issue of admissibility of the Cenvat credit cannot be raised. Therefore, I do not find any merits in the impugned orders, the same are set aside."
11. We further find that the similar view has also been taken by the Tribunal in the case of Shree Krishna Paper Mills & Ind. Ltd. (Supra). Para 8 of the said order is reproduced below for ready reference:-
"8. Heard the parties at length and perused the record. We find that the facts of the case are that appellant were manufacturing paper and paper products. They were availing Cenvat credit on inputs clearing the final products on payment of duty. Appellant also closed their factory and surrendered their Central Excise registration. As there was certain Cenvat credit lying unutilised in their Cenvat account, they filed refund claim. The refund claim was sanctioned to the appellant on closure of the factory, relying on the decision of Slovak India Trading Company Pvt. Limited (supra). The dispute arose between the parties on the ground that the activity undertaken by the appellant does not amount to manufacture, therefore they are not entitled to avail Cenvat credit. Consequently, they are not entitled to refund claim. We find that, at no stage, it has been questioned to the appellant that for denial of Cenvat credit which are not entitled to them. Moreover, the Revenue collected the duty from the appellant, although the Revenue was of the view that activity undertaken by the appellant does not amount to manufacture. At the stage of filing of refund claim, Revenue cannot correct their wrong doings. Therefore, the Service Tax Appeal No.70232 of 2019 6 issue of non-entitlement of Cenvat credit cannot be raised at the stage of entertaining refund claim without challenging the availment of Cenvat credit. In that circumstance, the decision in the case of Pitamber Coated Paper Limited (supra) is not applicable to the facts of this case, as in this case, at any stage, nowhere the availment of Cenvat credit was questioned rather the Revenue collected duty from the appellant on their final products."
12. In view of the above discussions, we hold that the eligibility to the Cenvat credit cannot be examined at the time of processing the refund claim filed under Rule 5 of CCR, 2004 read with Notification No.27/2012-CE dated 18.06.2012. The appeal filed by the Appellant is therefore allowed with consequential relief, as per law.
(Operative part of the Order pronounced in open court) (P. K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) LKS