Custom, Excise & Service Tax Tribunal
M/S 3D Plm Software Solutions Ltd vs Commissioner Of Service Tax-Vii, ... on 13 January, 2017
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. ST/86565, 86885, 86886 & 86887/16 (Arising out of Order-in-Appeal No. MUM/SVTAX-002-APP-245 to 248-15-16 dated 23.03.2016 passed by the Commissioner of Service Tax (Appeals), Mumbai-II). For approval and signature: Honble Shri Raju, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== M/s 3D PLM SOFTWARE Solutions Ltd. Appellant Vs. Commissioner of Service Tax-VII, Mumbai Respondent Appearance: Shri Prasad Paranjape, Advocate for Appellant Shri A.B. Kulgod, AC (AR) for Respondent CORAM: SHRI RAJU, MEMBER (TECHNICAL) Date of Hearing: 13.01.2017 Date of Decision: 30.01.2017 ORDER NO. Per: Raju
These four appeals have been filed by M/s 3D PLM SOFTWARE Solutions Ltd. Al the appeals involved identical question. Appellants had filed periodic claim of refund of CENVAT Credit availed on exported services. Part of the refund was rejected. Aggrieved by the said order of the lower authorities, the appellants are before Tribunal.
2. Learned Counsel for the appellant argued that the issue involved is if it is open to the authorities to refuse credit of Service Tax under the proceedings involving claim of rebate. He argued that the appellants had filed claim of refund under Rule 5 of the Cenvat Credit Rules, 2004. During the said proceedings, it was held that there is no nexus between the services exported and the certain input services. Consequently part refund was rejected by the lower authorities. Learned Counsel argued that no show-cause notice was issued and in these circumstances credit once availed cannot be denied to the appellant. He further argued that 99% of their output services were exported and the credit has been availed to eligible services. He argued that once availment of credit is not challenged, refund of credit as per rule 5 of Cenvat Credit Rules cannot be challenged. He relied on the Circular issued by CBE&C vide No. 120/01/2010-Service Tax dated 19.1.2010, wherein CBE&C clarified the issue. He further argued that even otherwise credit of input services is available to them as per various judicial decisions.
3. Learned AR relied on the impugned order.
4. I have gone through the rival submissions. I find that the appellants have sought refund of CENVAT Credit availed by them. Part of the refund claim has been rejected alleging that the nexus between the input services and the export services has not been established. In this regard, the clarification issued by the CBE&C vide Circular dated 19.1.2010 is relevant. Para 3.1.1 of the said Circular reads as follows: -
3.1.1 The primary objection indicated by the field formations is that the language of Notification No. 5/2006-CX (NT) permits refund only for such services that are used in providing output services. In other words, the view being taken is that to be eligible for refund, input services should be directly used in the output service exported. As regards the extent of nexus between the inputs/input services and the export goods/services, it must be borne in mind that the purpose is to refund the credit that has already been taken. There cannot be different yardsticks for establishing the nexus for taking of credit and for refund of credit. Even if different phrases are used under different rules of CENVAT Credit Rules, they have to be construed in a harmonious manner. To elaborate, the definition of input services for manufacturer of goods, as given in Rule 2 (l) (ii) of CENVAT Credit Rules, 2004, includes within its ambit all services used "in or in relation to the manufacture of final products" and includes services used "directly or indirectly". Similarly Rule 2 (l) (i) of CENVAT Credit Rules also gives wide scope to the input services for provider of output services by including in its ambit services "used....for providing an output service". Similar is the case for inputs. In view of the above, it is clear that if availment of credit of the Service Tax has not been challenged, the nexus between input services and the export services cannot be challenged.
5. In view of the above, the impugned order is set aside and the appeals are allowed with consequential relief, if any.
(Pronounced in Court on 30.01.2017) (Raju) Member (Technical) Sinha 3 Appeal No. ST/86565, 86885-86887/16