Custom, Excise & Service Tax Tribunal
Commissioner Of Service Tax, Chennai ... vs Scioinspire Consulting Services ... on 5 July, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Application No.ST/MISC/40446/2016 and
Appeal No.ST/41103/2016
[Arising out of Order-in-Appeal No.367/2015 (STA-II) dated 28.12.2015 passed by the Commissioner of Service Tax
(Appeals-II), Chennai).
Commissioner of Service Tax, Chennai III : Appellant
Versus
SCIOinspire Consulting Services (India) Pvt. Ltd. : Respondent
Appearance:
Shri P. Anbuchelvan, Superintendent (AR) For the Appellant Shri M. Karthikeyan, Advocate, For the Respondent CORAM :
Honble Shri P.K. Choudhary, Judicial Member Date of Hearing/Decision:05.07.2016 FINAL ORDER No.41373/2016 Since the issue involved in this appeal lies in a narrow compass, after disposing the stay application filed by Revenue, the appeal itself is taken up for hearing and decision.
2. The brief facts of the case are that M/s. SCIO Inspire Consulting Services (India) Pvt. Ltd., the appellant herein are registered with the Service Tax for providing IT and Business Auxiliary Service (BAS). The respondent assessee filed a refund claim of Rs. 4,56,924/- being the service tax paid on input service credit taken during the period October 2012 to December 2012. On adjudication, the Asst. Commissioner of Service Tax sanctioned a refund of Rs.86,457/- and rejected the balance amount on the ground of ineligible input services and on limitation. On appeal, the Commissioner (Appeals) set aside the OIO to the extent of (i) rejecting part of the refund claim on the ground of Non-registration of premises (ii) rejecting part of the refund claim on the ground of limitation of time. Revenue is aggrieved by this order and on appeal before this Tribunal.
3. Ld. A.R, Shri P.Anbuchelvan, Superintendent reiterated the findings of the adjudicating authority and the Commissioner (Appeals) and submitted that the adjudicating authority has rightly denied the input service credit of Rs.3,70,467/- on the ground of ineligible input services and limitation. However, the Commissioner (Appeals) set aside the impugned order to the extent of rejection of refund claim as time barred and also held that non-registration of premises cannot be a ground to reject the refund claim, hence, the order passed by the Ld. Commissioner (Appeals) is not legal and proper. He has observed that the relevant date in respect of refund claim of export of services for the period after 01.04.2012 i.e., after the amendment made in the definition of "Export turnover" under Rule 5 of CCR, 2004, shall be the last day of the quarter for which refund is claimed and held that the refund claim for the period October 2012 to December 2012 was filed only on 31.10.2013. He submitted that the date of invoice should be the relevant date and not the date of export and Notification No. 27/2012 CE (NT) prescribes a condition for grant of refund and the same has to be implemented and applied and it mandates that one claim should be filed for a quarter is only to restrict the number of claims and not to override the provisions of Section 11B. Hence, he prayed that the impugned order may be set aside and the order of the adjudicating authority be upheld.
4. Ld. Advocate, Shri M.Karthikeyan, appearing on behalf of the respondent-assessee submitted that the relevant date is the date of receipt of foreign exchange and therefore the refund claim was filed well within time and cannot be held as time barred. In support of his contentions, he relied on the decision of the Tribunal, New Delhi in the case of Bechtel India Pvt. Ltd. CCE, Delhi 2014 (34) STR 437 (Tri.-Del.), and Mumbai Bench of the Tribunal in the case of CST, Goa Vs. Ratio Pharma India Pvt. Ltd. 2015 (39) STR 31 (Tri.- LB)., wherein it has been held that relevant date for determining the limitation period is the date of receipt of foreign exchange. Hence, he prayed that the departments view is not correct and the matter can be remanded to the LAA for verification of date of receipt of payment of foreign exchange to ascertain whether it is well within the period of limitation. He further submitted that this plea was also taken before the authorities below. He also argued in respect of the service of Renting of Immovable Property denied on the ground of non-registration of premises; that there is no specific condition either in Rule 5 of the CCR, 2004 or in the Notfn No.27/2012-CE (NT) dt. 18.06.2012 requiring Registration of premises for claiming refund In support of his submissions, he relied on the decision of Hon'ble High Court of Karnataka in the case of mPortal India Wireless Solutions (P) Ltd. Vs CST Bangalore 2012 (27) STR 134.
5. Heard both sides and perused the appeal records. Let me first take up the issue of denial of credit on the ground of non-registration of premises. I find that this issue has already been settled by the Hon'ble High Court of Karnataka in the case law relied upon by learned counsel in the case of mPortal India Wireless Solutions (P) Ltd. Vs CST Bangalore 2012 (27) STR 134. The said Karnataka High Court's decision was followed by this very Bench vide FINAL ORDER No.40917-40922/2016 [ST/40887 to 40892/2015] dt. 09.06.2016 in the case of KLA Tencor Software India Private Ltd. Vs CST Chennai-III. The relevant paragraph of this Bench order is reproduced as under :-
"7. With regard to issue (i), the contention of the appellant is that under Section 69 of the Finance Act, 1994 read with Rule 4 of Service Tax Rules, 1994 registration under service tax legislation is required only for service providers who are liable to pay service tax and the appellant herein is predominantly engaged in the provision of export of service and therefore they are not liable to pay service tax and consequently not required to register with the department. The appellant has placed reliance on the judgement of Karnataka High Court in the case of mPortal India Wireless Solutions Pvt. Ltd. Vs ST 2012 (27) STR 134. The Honble High Court at para-7 of its order has held as follows :-
"7.?Insofar as requirement of registration with the department as a condition precedent for claiming Cenvat credit is concerned, learned counsel appearing for both parties were unable to point out any provision in the Cenvat Credit Rules which impose such restriction. In the absence of a statutory provision which prescribes that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund, the three authorities committed a serious error in rejecting the claim for refund on the ground which is not existence in law. Therefore, said finding recorded by the Tribunal as well as by the lower authorities cannot be sustained. Accordingly, it is set aside."
The above ruling of Honble High Court is squarely applicable to the facts of this case.
Another ruling that has been relied on by the appellant is that of Dorling Kindersley (I) Pvt.Ltd. Vs CCE & ST, Noida (supra) which is also on the aspect of denial of refund claim on the ground of non-registration and the same was held to be unsustainable. Following these judicial precedents, the first issue is answered in favour of the appellant holding that even though they were not registered prior to 16.6.2008, they are eligible for refund of the unutilized credit which was accumulated prior to registration."
6. As regards the issue of rejection of claim on limitation, it is seen that the adjudicating authority while deciding the refund claim held that refund claim pertaining to export invoices on or before 31-10-2012 were hit by time bar since the refund claim was received after one year from the date of above said export invoice and hence rejected as ineligible credit. But, Commissioner (Appeals) dealt the limitation issue in depth and passed a detailed order and held that inasmuch as the refund is related to Cenvat credit taken during the given period and the same shall be taken till the last day of the given period, namely the quarter, the claim for refund can only be filed after the last date of the respective quarter and the relevant date is the date of export and are entitled in terms of Notification No. 27/2012 dated 18.06.2012 read with Section 11 B of CEA, 1944, and the refund claim is not hit by limitation. The case laws relied upon by the respondent assessee are in their favour and they are squarely applicable to the present case. As per Rule 5 of CCR, 2004, in case of export of services, export is complete only when foreign exchange is received in India. This aspect has not been brought out by both the authorities below. Hence, the matter is remanded to the adjudicating authority with the direction to verify the date of receipt of foreign exchange received in India to determine the relevant date of export to decide the limitation aspect.
7. I also find that in case of KLA Tencor Software Private Limited vs. CST, Chennai (Final Order No. 40917-40922/2016 dt. 9.6.2016), the matter had been remanded to the lower adjudicating authority to verify the claim based on the recent Notification No. 14/2016 dt. 1.3.2016.
8. As regards denial of refund on renting of immovable property service on account of non-registration of the premises, I find that the law is well settled. In the case of KLA Tencor Software Private Limited Vs CST, Chennai (Final Order No. 40917-40922/2016 dt. 9.6.2016), it was held that registration is not a mandatory condition to avail refund under the Notifications prescribed by placing reliance on the ruling of mPortal Wireless Solutions Private Limited Vs CST, Bangalore - 2012 (27) STR 134 (Kar.). The ruling of CCE Vs Sutham Nylocots - 2014 (306) ELT 255,relied upon by the Revenue, is not applicable to the facts of the present case in as much as it was a case of classification/clandestine removal and credit based on registration is not a prescribed condition in terms of the exemption notification would not automatically entitle CENVAT Credit. Since, the ruling of the Madras High Court is not applicable to the facts of the present case and that the ruling of the Karnataka High Court is more akin to the facts of the present case, the refund of CENVAT Credit on renting of immovable property is allowed, follow the ruling of the Karnataka High Court.
Accordingly, I pass the following order:
a) As regards limitation, the appeal is remanded to the adjudicating authority
b) As regards denial of refund on account of non-registration, department appeal is rejected.
The appeal is disposed of in the above terms. Stay application also gets disposed of.
(Operative part of the order pronounced in open court on 05.07.2016) (P.K. CHOUDHARY) JUDICIAL MEMBER gs 1