Custom, Excise & Service Tax Tribunal
M/S. Jubilant Biosys Ltd vs Commissioner Of Service Tax Bangalore ... on 6 November, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/20562/2016-SM, ST/20563/2016-SM, ST/20564/2016-SM, ST/20565/2016-SM [Arising out of Order-in-Appeal No. 17-21/2016 dated 21/01/2016 passed by Commissioner of Service Tax (Appeals), BANGALORE.] M/s. Jubilant Biosys Ltd No.96, Industrial Suburb, 2nd Stage, Industrial Area, BANGALORE - 560022 KARNATAKA Appellant(s) Versus Commissioner of Service Tax BANGALORE SERVICE TAX- I 1ST TO 5TH FLOOR, TTMC BUILDING, above BMTC BUS STAND,DOMLUR BANGALORE, - 560071 KARNATAKA Respondent(s)
Appearance:
Mr. Syed Peeran, Advocate LAKSHMI KUMARAN & SRIDHARAN WORLD TRADE CENTRE NO.404-406, 4TH FLOOR, SOUTH WING BRIGADE GATEWAY CAMPUS NO.26/1, DR. RAJKUMAR ROAD, BANGALORE - 560 055 KARNATAKA For the Appellant Mr. Parasivamurthy, AR For the Respondent Date of Hearing: 06/11/2017 Date of Decision: 06/11/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 22709-22712 / 2017 Per : S.S GARG The present appeals are directed against the common impugned order dated 21.1.2016 passed by the Commissioner (A) whereby the Commissioner (A) has remanded the matter to the original authority for reconsideration of the decisions in the Order-in-Original on facts vis-`-vis provisions of CENVAT Credit Rules, 2004 without giving any findings on the nexus of each input service and further, there is no finding on the incorrect calculation adopted by the original authority. Since the issue involved in all these four appeals is common, therefore all the four appeals are being disposed of by the present common order. The details of four appeals are given below: Appeal No. Period Refund Claimed Refund Rejected ST/20562/2016 Oct.Dec.2010 Rs.21,96,083/-
Rs.4,72,332/-
ST/20563/2016 Jan.-Mar. 2011 Rs.26,54,560/-
Rs.8,54,678/-
ST/20564/2016 Apr.-June 2011 Rs.13,79,477/-
Rs.4,65,164/-
ST/20565/2016 July-Sep. 2011 Rs.20,07,762/-
Rs.5,40,527/-
2. Briefly the facts of the present case are that the appellant is a 100% Export Oriented Unit under the jurisdiction of Cochin SEZ and are engaged in rendering Scientific and Technical Consultancy Services which are substantially exported. The appellant received various input services like manpower supply service, telephone service, security service, catering service, courier service, scientific and technical consultancy service to provide their output service and availed CENVAT credit of the service paid on these input services. Since the appellant is engaged in the export of service, there is a huge accumulated CENVAT credit of tax paid on input services. Consequently, the appellant filed refund claims under Rule 5 of CENVAT Credit Rules read with Notification No.5/2006 dated 14.3.2006 in respect of unutilized CENVAT Credit of service tax paid on input services used for providing output services exported to overseas customers. Various show-cause notices were issued to the appellant for denial of refund on account of lack of nexus between the input services and the output services exported. Aggrieved by the Order-in-Original, appellant filed appeal before the Commissioner (A), who only remanded the case back to the original authority without giving any findings on the nexus of input services with output services exported.
3. Heard both the parties and perused the records.
4. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same is contrary to the binding judicial precedents. He further submitted that during the impugned period, the definition of input service was very wide and include any service used by the manufacturer whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal. He also submitted that the input service include activities relating to business. He further submitted that similar issues which are involved in the present case were decided in favour of the appellant in respect of previous period vide Final Order No.26721-26723/2013 dated 9.10.2013 and by Orders-in-Original and Orders-in-Appeal that were passed during that period. He also submitted that the department has wrongly quantified the export turnover. The original authority has considered the value of export proceeds realized and not the total value of services exported during the quarter for arriving at the eligible amount of refund. Further, the department has reduced the value of export turnover to the extent of proceeds realized during the relevant quarter while adding the export services billed but pending realization to the total turnover, which is wrong. He also submitted that the Notification No.5/2006-CE merely mentions the export turnover as the total value of goods and services exported during the quarter and not the amount realized from the exports. He also submitted that for the purpose of denominator in the formula, the total turnover is to be the sum of value of all the output services and exempted services including the services exported. Therefore, the total turnover is construed to comprise of exported services and other output services. The learned counsel further submitted that each of the input service has been held to be input service by various decisions. Following is the table showing the nature of services rendered and relied upon case laws in support of their claim:
Sl. No. Particulars Case Laws 1 Banking and Financial Services * Xilinx India Technology Services (P) Ltd. v. Commissioner of Central Excise, & S.T., Hyderabad, reported at 2016 (44) S.T.R. 129 (Tri.-Hyd) * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) 2 Courier Services * Megma Design Automation (I) Pvt. Ltd. v. Commissioner of Service Tax, Bangalore, reported at 2015 (40) S.T.R. 800 (Tri.- Bang.) * Xilinx India Technology Services (P) Ltd. v. Commissioner of Central Excise, & S.T., Hyderabad, reported at 2016 (44) S.T.R. 129 (Tri.-Hyd) 3 Outdoor Catering service * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) 4 Custom Clearing Services * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) * Xilinx India Technology Services (P) Ltd. v. Commissioner of Central Excise, & S.T., Hyderabad, reported at 2016 (44) S.T.R. 129 (Tri.-Hyd) 5 Telecommunication service * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) 6 Maintenance or Repair Services * Xilinx India Technology Services (P) Ltd. v. Commissioner of Central Excise, & S.T., Hyderabad, reported at 2016 (44) S.T.R. 129 (Tri.-Hyd) * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) 7 Management Consultancy * KPMG v. Commissioner of Central Excise, New Delhi, reported at 2014 33 STR 96 (Tri-Del.) * Cadila Pharmaceuticals Ltd v. CCE, Ahmedabad, reported at 2010 (17) STR 31 (Tri.-Ahmd.) 8 Renting a Cab Services * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) 9 Security Agency Services * Alliance Global Services IT (I) (P) Ltd. v. CC, CE & ST, Hyderabad-II, reported at 2016 (42) S.T.R. 438 (Tri.-Hyd.) 10 Technical Testing and Analysis Service * Commissioner of Central Excise, Indore v. Kriti Industries (I) Ltd., reported at 2016 (43) S.T.R. 443 (Tri.-Del.) * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) 11 Business Auxiliary Service * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) * Utopia India Pvt. Ltd v. Commissioner of Service Tax, Bangalore, reported at 2011 (23) STR 25 (Tri-Bang.) 12 Business Support Service * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) * Utopia India Pvt. Ltd v. Commissioner of Service Tax, Bangalore, reported at 2011 (23) STR 25 (Tri-Bang.) 13 Chemical Purchase * Final Order Nos. 26721-26723/2016 dated 09.10.2013 14 General Insurance Service * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) * Utopia India Pvt. Ltd v. Commissioner of Service Tax, Bangalore, reported at 2011 (23) STR 25 (Tri-Bang.) * Final Order Nos. 26721-26723/2016 dated 09.10.2013 15 Travel Agent service * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) * Final Order Nos. 26721-26723/2016 dated 09.10.2013 16 Consulting Engineer Service * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) * Delphi Automotive Systems Pvt. Ltd. v. Commissioner of Service Tax, Bangalore, reported at 2015 (37) S.T.R. 522 (Tri.-Bang.) 17 Legal Consultancy Service * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) 18 Scientific & Technical Consultancy Service * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) 19 Sponsorship Service * Genpact India v. Commissioner of Service Tax, Delhi, reported at 2016 (41) S.T.R. 999 (Tri.-Del.) 20 Professional Consultancy Service * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) 21 Advertising Services * Final Order Nos. 26721-26723/2016 dated 09.10.2013 * Convergys India Services (P) Ltd. v. Commissioner of Service Tax, New Delhi, reported at 2012 (25) S.T.R. 251 (Tri.-Del.) 22 Manpower Recruitment or Supply * Commissioner of Service Tax, Bangalore v. Jubilant Biosys Ltd., reported at 2016 (42) S.T.R. 729 (Tri.- Bang.) * Utopia India Pvt. Ltd v. Commissioner of Service Tax, Bangalore, reported at 2011 (23) STR 25 (Tri-Bang.) * Final Order Nos. 26721-26723/2016 dated 09.10.2013 23 Online Information and Data Base Access or Retrieval * Final Order Nos. 26721-26723/2016 dated 09.10.2013
5. On the other hand, the learned AR reiterated the findings of the impugned order.
6. After considering the submissions of both the parties and perusal of the material on record, I find that all the impugned services on which refund has been denied fall in the definition of input service as held in decisions cited supra. Further, I also find that most of the services have been held to be input services in appellants own case cited supra. Therefore, by following the ratios of the above said decisions, I hold that various input services fall in the definition of input services as contained in Rule 2(l) of CENVAT Credit Rules. Further, I also find that the lower authority has wrongly quantified the export turnover as discussed supra. Further, I also find that the Commissioner (A) with regard to wrong quantification of refund amount has observed that the original authority shall examine this aspect in de novo proceedings and shall apply the formula correctly while computing the refund claim amount. Since the Commissioner (A) has only directed the adjudicating authority to correctly apply the formula, therefore, I also hold that the adjudicating authority while computing the refund claim will correctly apply the formula as prescribed under the said Notification. In view of my discussions above, I allow the appeals of the appellant and remand the matter back to the original authority to quantify/sanction the refund after applying the formula correctly as prescribed under the Notification. Consequently, all the four appeals are allowed in above terms.
(Operative portion of the Order was pronounced in Open Court on 06/11/2017) S.S GARG JUDICIAL MEMBER rv...
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