Custom, Excise & Service Tax Tribunal
Espire Infolabs Pvt Ltd vs Delhi 1 on 17 August, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-SM
COURT -IV
Service Tax Appeal No.ST/51474/2018- CU [SM]
[Arising out of Order-in-Original/Appeal No.110-113/ST/DLH/
2017 dated 01.01.2018 passed by the Commissioner
(Appeals), Central Tax/GST, Delhi]
M/s. Espire Infolabs Pvt. Ltd. ...Appellant
Vs.
C.C.E., Delhi ... Respondent
Present for the Appellant : Mr.Vishal Jain, C.A. Present for the Respondent: Mr.P.Juneja, D.R. Coram: HON'BLE MRS. RACHNA GUPTA, MEMBER (JUDICIAL) Date of Hearing/Decision: 17.08.2018 FINAL ORDER NO. 52865/2018 PER: RACHNA GUPTA The present Adjudication has arisen out of refund claim amounting to Rs.6,63,657/- filed by the appellant under Notification No.27/2012-NT dated 18th June, 2012. The said refund claim was filed by the appellant on the export of services for Cenvat Credit availed on input services. The original adjudicating authority vide its order dated 6 th December, 2016 has rejected the claim mainly on the ground of there being a difference in mailing address and there being 2 ST/51474/2018- [SM] a difference in export turnover given in ST-3 and that of the actual export turnover. Being aggrieved, an appeal before the Commissioner (Appeals) was filed, who vide his order dated 1 st January, 2018 has held appellant eligible to the benefit of Cenvat Credit on the input service received at unregistered premises.
2. Appeal was filed challenging the said order about the decision therein and also about the issue of export turnover which was not considered in the said order. Commissioner (Appeals) vide order of 1st January, 2018 has held appellant to be eligible for the benefit of Cenvat Credit on the input services received at the unregistered premises. However, directed remand for re-quantification of the said demand. As far as the issue of export turn-over whether to be equal to total turn-over or not, the relief to the appellant was declined. Resultantly, the present appeal.
3. I have heard Mr. Vishal Jain, ld. Advocate for the appellant and Mr. P. Juneja, ld. D.R. for the Department.
4. It is submitted on behalf of the appellant that in the present case no show cause notice at all was issued and the adjudication initiated on the application of the appellant seeking refund of the cenvat credit availed on the input services. The main issue, simultaneously, involved was of the export turnover but the original adjudicating authority did not consider the same. Commissioner (Appeals) also is alleged to 3 ST/51474/2018- [SM] have wrongly decided the said issue, while computing the total turn-over with inclusion of the value given in the ST-3 Returns and ignoring the fact that the money in foreign exchange for the services provided was not received during the relevant quarter. The order accordingly is prayed to be set aside. To support their case, ld. Counsel relied upon the decisions in the case of CCE, Pune-III vs. AAM Services India Pvt. Ltd. - 2016 (42) S.T.R. 760 (Tri.-Mumbai) & CCE & GST, Delhi vs. M/s. Providence Equity Advisors India Ltd. - 2018 - TIOL - 1638 - CESTAT - Del.
5. Ld. D.R. on the other hand has impressed upon the findings of Commissioner (Appeals) in para 7 of the order. It is submitted that Commissioner (Appeals) has justified the calculation of total turn-over on the basis of the invoices for which payment has been received. As such, there is no infirmity in the order. Appeal is accordingly, prayed to be dismissed.
6. After hearing both the parties, I am of the considered view that since the part issue of appellant has already been decided in his favour and re-quantification has already been directed for the same, the only issue for the present adjudication is as to whether export turn-over of inputs would be equal to the "Total Turnover" in terms of clause (E) of Rule 5 (1) of Cenvat Credit Rules, 2004 and that when there is no dispute of Service Tax payment on input services, whether the 4 ST/51474/2018- [SM] assessee is eligible for refund of Cenvat Credit which remains unutilized. The relevant provision shall be the Rule 5 of Cenvat Credit Rules, 2004 which reads as follows:-
(A) "Refund amount" means the maximum refund that is admissible;
(B) "Net CENVAT credit" means total CENVAT credit availed on inputs and input services by the manufacturer or the output service provider reduced by the amount reversed in terms of sub-rule (5C) of rule 3, during the relevant period;
(C) "Export turnover of goods" means the value of final products and intermediate products cleared during the relevant period and exported without payment of Central Excise duty under bond or letter of undertaking; (D) "Export turnover of services" means the value of the export service calculated in the following manner, namely:--
Export turnover of services = payments received during the relevant period for export services + export services whose provision has been completed for which payment had been received in advance in any period prior to the relevant period - advances received for export services for which the provision of service has not been completed during the relevant period; (E) "Total turnover" means sum total of the value of--
(a) all excisable goods cleared during the relevant period including exempted goods, dutiable goods and excisable goods exported;
(b) export turnover of services determined in terms of clause (D) of sub-rule (1) above and the value of all other services, during the relevant period; and
(c) all inputs removed as such under sub-rule (5) of rule 3 against an invoice, during the period for which the claim is filed.
(2) This rule shall apply to exports made on or after the 1st April, 2012:
7. The perusal of provision makes it clear that the total turn-over has to be calculated on such value of export turnover as is to be calculated in the manner provided under sub-rule
5 ST/51474/2018- [SM]
(d) of Rule 5 of CCR. It is the case of the appellant that the Department has calculated the value of those invoices as well for which the payment was not received during the relevant quarter though those invoices were mentioned in the ST-3 Returns. Perusal of the orders of adjudicating authority below makes it clear that the findings thereof are based upon the value as was mentioned in the ST-3 Returns. I therefore, opined that Commissioner (Appeals) in para 7 of the order under challenge has technically appreciated the above provision but he is opined to have ignored a relevant fact that all the invoices as were mentioned in impugned ST-3 Returns could not have received the payment which otherwise was to be in foreign currency. The documents on record even the order of original adjudicating authority acknowledges the FICR, for some of the said invoices to have been received later.
8. Also, I observe that the meaning of „all other services‟ as mentioned in the definition of „total turnover‟ under Rule 5 (1) E of CCR, 2004 has not been provided in CCR, 2004. As per the „Law of purposive interpretation‟ the Commissioner (Appeals) observed that the text proceeding the phrase „all other services‟ is „export turnover‟ . Hence, „all other services‟ would mean „value of all services other than the exported service‟. The Commissioner (Appeals) observed that in CCE vs. Aam Services India Pvt. Ltd. [2016 (42) STR 760 (Tribunal - Mumbai)], the Hon‟ble Tribunal held that when entire turnover is exported and no other service is provided in 6 ST/51474/2018- [SM] domestic tariff area, then only „export turnover „ will be equal to „total turnover‟. But I hold these findings as erroneous, after perusing the case law as cited by the appellant and observing that inasmuch as, issue stands decided by the various decisions. The Revenue could not have distinguished those outcomes. The emphasises as put forth by the Revenue has already been considered above in the terms that the adjudicating authority despite appreciating the legal position have failed to appreciate the corresponding factual position as far as the inclusion of the value of the unpaid invoices is concerned.
9. Resultantly, I find no reason to disagree with the decision as cited by the appellant before me. The order under challenge is opined to be erroneous on this aspect. Accordingly, order to be set aside. Appeal stands accordingly allowed.
[Dictated and Pronounced in the open Court] (RACHNA GUPTA) MEMBER (JUDICIAL) Anita