Custom, Excise & Service Tax Tribunal
Microsoft India (R&D) Pvt Ltd vs Commissioner Of Service Tax ... on 24 September, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 21742 / 2014 Appeal(s) Involved: ST/2231/2010-DB [Arising out of Order-in-Appeal No.203/2010-ST dated 01/06/2010 passed by the Commissioner of Central Excise (Appeals-II), Bangalore.] MICROSOFT INDIA (R&D) PVT LTD LEVEL 2-6, SIGNATURE BUILDING, BLOCK - E, EMBASSY GOLF LINKS BUSINESS PARK, OFF INTERMEDIATE RING ROAD, BANGALORE 560 071. 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. Prasad Pranajpe, Advocate PDS LEGAL 14, MITTAL CHAMBERS, 1ST FLOOR, NARIMAN POINT, MUMBAI-400 021 For the Appellant Mr. S. Teli, Dy. Commissioner (AR) For the Respondent CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Date of Hearing: 24/09/2014 Date of Decision: 24/09/2014 Order Per : B.S.V.MURTHY The appellant is a 100% EOU, is registered with the service tax under the category of Business Auxiliary Services. They filed refund claim under Notification No.5/2006-C.E. NT dated 14.3.2006 in respect of unutilized CENVAT credit balance for the period from October 2007 to March 2008 for an amount of Rs.1,92,71,780/-. Show-cause notice was issued on the ground that they had not furnished the documentary evidences as listed in the impugned order. Both the lower authorities have rejected the refund claim on the ground that services are provided in India and used in India.
2. Hearth both the sides. Learned counsel submitted that the appellants have two units in India. The unit in Bangalore provides product support service to Microsoft Corporation and the unit in Hyderabad provides research and development service to Microsoft Corporation Ltd. He submits that the original authority travelled beyond the scope of show-cause notice and took a view that appellants did not provide documentary evidence to prove that the service of manpower recruitment or supply service were used outside India on the ground that the services provided by the appellant to their only customer are provided from India. However, the Commissioner (A) has not recorded any observation on this issue. His conclusions are available in paragraph 5 of the impugned order which is reproduced for better appreciation.
5. Further, I find from the impugned order that the appellant has established a Global Technical Support Centre (GTSC) in Bangalore which are engaged in providing on-call remote product support services to Microsoft Corporation USAs (MSFT) customers worldwide and appellant entered the agreement to carry out the corporate and other services within the territory and the territory shall mean the region of India as stipulated in the agreement, this aspect has been widely discussed by the adjudicating authority in the impugned order and rejected the refund claim on merits. Therefore, I fully agree with the adjudicating authority and I do not want to interfere with the findings of the lower authority in the present appeal.
3. On going through the records, we find that the refund claim could have been clearly identified as relatable to the consideration received as a result of product support service agreement. The appellants have produced some sample invoices and from one of the invoices, we clearly find that the invoice not only shows that appellant had billed for product support service fee but had also mentioned the agreement dated July 1st, 2002 in the invoice also. In spite of this, it is not known how the learned Commissioner (A) has come to the conclusion that territory shall mean the region of India as stipulated in the agreement. We find that in product support services agreement, it is clearly provided that territory shall mean worldwide. When according to the agreement both the parties have to understand that territory means worldwide how an inference could be drawn that territory means region of India could not be understood. The learned counsel on behalf of the appellants submitted that this meaning has been given only in parent subsidiary agreement which is a separate agreement and the refund claim filed by them has nothing to do with this agreement. In any case, as we find that the appellants are providing product support service from India and according to the agreement the product support services shall include standard MSFT product support services for products which are generally made available to end-users in the territory and shall include requests for support originating from within the territory. Products support services shall include phone, email, web based and onsite support for all MSFT products. It cannot be said that services have been used in India. We find that appeal has been rejected on the grounds that are not sustainable and accordingly appeal is allowed with consequential relief to the appellants.
(Operative portion of the order has been pronounced in open court) S.K. MOHANTY JUDICIAL MEMBER B.S.V.MURTHY TECHNICAL MEMBER rv 3