Custom, Excise & Service Tax Tribunal
Megma Design Automation India Pvt Ltd vs Commissioner Of Service Tax ... on 13 May, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/2301/2012-SM, ST/2302/2012-SM, ST/2305/2012-SM, ST/2310/2012-SM [Arising out of Order-in-Appeal No. 102, 103, 105, 105, 106/2012 dated 10/05/2012 & and OIA No. 107, 108, 109, 110, 111 & 112/2012 dated 10/05/2012 passed by the Commissioner of Central Excise (Appeals-II), Bangalore.] For approval and signature: HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes MEGMA DESIGN AUTOMATION INDIA PVT LTD PRESTIGE TECH PARK, JUPITER (2A) BLOCK, 5TH FLOOR, SARJAPUR MARATHHALLI RING ROAD, KADABEESANAHALLI VILLAGE, VARTHUR HOBLI, BANGALORE 560 087 Appellant(s) Versus Commissioner of Service Tax BANGALORE-SERVICE TAX 1ST TO 5TH FLOOR, TTMC BUILDING, above BMTC BUS STAND,DOMLUR BANGALORE 560 071. KARNATAKA Respondent(s)
Appearance:
Mr. Akbar Basha, CA HIRAGANGE & ASSOCIATES #1010, 1st floor(Above Corp. Bank) 26th Main, 4th T Block, Jayanagar, BANGALORE - 560041 KARNATAKA For the Appellant Mr. S. Teli, Dy. Commissioner (AR) For the Respondent Date of Hearing: 13/05/2015 Date of Decision: 13/05/2015 CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER Final Order No. 21153-21156 / 2015 Per : B.S.V.MURTHY In all the appeals, issue involved is common and therefore all the appeals are taken together and a common order is passed. The issue involved is whether the stand taken by the Revenue that there is no nexus between the input services and the output services and therefore appellant is not eligible for refund of accumulated CENVAT credit under Notification No.5/2006-CE dated 14.3.2006 issued under Rule 5 of CENVT Credit Rules, 2004 is correct or not.
2. The learned counsel submits a table containing the details of input services and how they have been used by the appellants and submits that in all these cases the services have been used for providing output services only and therefore condition of Notification that the services are to be used for providing output services have been fulfilled. He submits that refund has been rejected on the ground that these services are not essential.
3. On going through the table submitted before me, I find that in respect of these services reliance of the appellants on the decisions of the Tribunal mentioned against each service is applicable and appropriate. Moreover, the submissions regarding the nature of service received and its use also shows that stand taken by the Revenue that there is no nexus between input service and output service is not correct. For better appreciation, the name of services and the justification for availability as submitted with which I agree is reproducted below:
Name of input service Nature of view of input service by assessee Justification for availability of CENVAT credit Transportation/travel services Transport services The said services are used to pick up and drop of employees. Appellant being in service industry and employees being a key resource, it is an obligation for the appellant to provide pick up and drop facilities to employees, as the company works 24 hours in shifts. Appellant wishes to rely upon the decision of M/s. Heartland Bangalore Transcription Services (P) Ltd. vs. CST: 2011 (21) STR 430 (Tri.-Bang.), wherein it was held that Rent-a-cab service used for transportation of employees is an essential input service. CCE vs. Deloitte Tax Services India Pvt. Ltd.: 2008 (11) STR 266 (Tri.-Bang.). Air Fare Ticket Air travel agent services The said services are used for booking of air ticket for their employees and other officials travelling for project site abroad for the execution of work in USA. Therefore it would be very essential for the employees of appellant to frequently travel to USA, for the purpose of resolving the queries arising out of the service rendered by appellant to its parent company. Emcon Technologies India Pvt. Ltd. vs. CC: 2013 (31) STR 441 (Tri.-Bang.) Xerox charges Business Support Services This service is used for maintenance of photocopying machine and for photocopying orders and various administrative related documents, offer letters, etc., which is essential to communicate client, vendors, employees, etc. The appellant submits that in case of Parason Machinery (I) Pvt. Ltd. vs. CCE: 2009 (16) STR 20 (Tro.-Mum.), credit was allowed on maintenance of photocopying machine.
Name of input service Nature of view of input service by assessee Justification for availability of CENVAT credit Food coupons and catering services Food coupons and catering services These services are availed to provide food to the employees during the office hours. The said issue is clearly covered by the decision of Stanzen Toyotetsu (P) Ltd.: 2011 (23) STR 444 (Kar.) Professional fees Management Consultants Professional fees is in respect of services from professional like Chartered Accountants, Lawyers, Management Consultants, HRM, ERP implementation, payroll, statutory compliance, etc. The said input services are very much essential in rendering the export services, in order to comply with various statutory requirements. Therefore very much essential for rendering the output service. Appellant wishes to rely upon the decision of M/s. Heartland Bangalore Transcription Services (P) Ltd. vs. CST: 2011 (21) STR 430 (Tri.-Bang.) wherein it was held that professional services of consultants are used for assisting the assessee in complying with various statutory provisions. Therefore it was eligible for refund. CCE vs. Deloitte Tax Services India Pvt. Ltd. : 2008 (11) STR 266 (Tri.-Bang.). Pest Control & Fumigation & House Keeping Management, Maintenance or Repair Services Pest Control services and fumigation treatment services are used in relation to house-keeping services, ensuring hygienic, clean and germ free work environment. As the appellant has vast number of employees, therefore maintaining the premises in a hygienic condition is very essential. Therefore the CENVAT credit on the said service is very much essential. The appellant wishes to rely upon the decision of M/s. L Oreal India Pvt. Ltd. vs. CCE: 2011 (22) STR 89 (Tri.-Mum.), wherein it was held that activity is in relation to business. Therefore CENVAT credit was available. Telecommunication Services Telecommunication Services Mobile services are used by employees of the company for conference calls with its client, which is used for the purpose of communication, in relation to business. In this regard, the appellant wishes to rely upon the decision of CCE vs. Axiom Impex International Ltd.: 2009 (13) STR 684 (Tri.-Chennai) and many more decisions, wherein CENVAT credit on mobile phones is held as admissible. CCE vs. Deloitte Tax Services India Pvt. Ltd.: 2008 (11) STR 266 (Tri.-Bang.) Fit out rent Renting of immovable property services Fit out rents is in respect of furniture and fitting, like sofas, air conditions, tables chairs, etc., which is provided along with the premises, fit out are the infrastructural support services, which facilitate in exporting of ITSS. Insurance service Insurance Auxiliary Service Insurance service is as per companys policy and the same is in line with the industrial requirement. As the said services are used for insurance of employees. The appellant is eligible for credit. Honble High Court in case of CCE vs. Stanzen Toyotetsu India (P) Ltd.: 2011 (23) STR 444 (Kar.) have held that CENVAT credit on insurance is available as CENVAT credit and refund. Forex Purchase Business Auxiliary Service The appellant submits that forex was purchased and the same given to the employees who go to US, in order to execute their work. Therefore the said activity is in relation to business, therefore appellant was entitled for CENVAT credit and refund. Courier Service Courier Services The appellant submits that courier services are used for couriering the documents like purchase orders, supporting documents pertaining to software development, employee communications for various administrative activity. CCE vs. Deloitte Tax Services India Pvt. Ltd.: 2008 (11) STR 266 (Tri.-Bang.) In view of the stand taken by me, appellant is eligible for the refund and there is nexus between input services and output service. Appeals are allowed with consequential relief, if any. The matters are remanded to the original authority for quantification of the refund claim and payment. (Order pronounced in open court) B.S.V.MURTHY TECHNICAL MEMBER rv 5