Custom, Excise & Service Tax Tribunal
M/S Cummins Research And Technology ... vs Commissioner Of Central Excise, ... on 30 December, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. ST/153/12 (Arising out of Order-in-Appeal No. P-III/RS/44/2012 dated 16.2.2012 passed by the Commissioner of Central Excise (Appeals), Pune-III). For approval and signature: Honble Shri P.S. Pruthi, 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 Cummins Research and Technology India Ltd. Appellant Vs. Commissioner of Central Excise, Pune-III Respondent Appearance: Shri Prasad Paranjape, Advocate for Appellant Shri B.K. Iyer, Supdt. (AR) for Respondent CORAM: SHRI P.S. PRUTHI, MEMBER (TECHNICAL) Date of Hearing: 30.12.2014 Date of Decision: 30.12.2014 ORDER NO. Per: Shri P.S. Pruthi
The appellant is in appeal against impugned order in appeal, which upheld the Order-in-Original rejecting refund of Rs.1,47,539/- out of the total refund claim of Rs.10,55,727/-.
2. The facts are that the appellant provided scientific and technical consultancy service from their unit, which is a 100% EOU set up in the Software Technology Park of India scheme (STPI) of the Government of India. The appellant claimed refund of input service tax under Notification No. 12/2005 on services which are used in providing the output service, which is exported. The adjudicating authority rejected the refund claim of Rs.1,47,539/- on the ground that the appellant had claimed rebate of Service Tax on bills which are prior to the date of declaration under Notification No. 12/2005 and also prior to the date of export, which is October, 2010. He held that the bills prior to the date of export have nothing to do with the period of export to which the refund claim pertains. The Commissioner (Appeals) upheld this finding stating that the claimant of rebate is required to prove the actual use of the input services for the service exported.
3. Heard both sides.
4. The learned Counsel for the appellant made the following submissions: -
(i) It is not in dispute that the appellant had used the relevant input services in providing the taxable services which are exported in terms of Export of Service Rules, 2005 by correctly following the procedure laid down in Notification No. 12/2005.
(ii) There will always be a time lag between the date of invoice on which the input services are received and the date of making payment to input service provider and they had claimed rebate after making payment to the input service provider. He relied on Boards Circular No. 120/01/10/Service Tax dated 19.1.2010
(iii) As regards the learned ARs contention that the appellant has not mentioned that the input service is used in providing export output service, he said that this objection is not therein the record of proceedings before the lower authorities.
(iv) The appellant paid ST in cash on domestic provision of service, which is a very small proportion of the total service provided. In any case, the tax on domestic provision of service was made in cash making the situation revenue neutral.
(v) Reliance is placed on Tribunals judgment in the case of Commissioner of Central Excise, Mysore Vs. Chamundi Textiles (Silk Mills) Ltd. 2010 (258) ELT 141 (Tri-Bang).
4. The learned AR reiterated the finding of the Commissioner and stated that the appellant has not proved that the input services were used in the exported services.
5. I have carefully considered the rival submissions. In this case, rebate has been sought under the provisions of Notification No. 12/2005 issued in terms of Rule 5 of the Export of Service Rules, framed under Notification No. 9/2005 dated 3.3.2005. I find that there is no dispute on the fact that the appellant had followed the procedure laid down in the Notification regarding filing of declaration giving all requisite details such as description, value, amount of duty payable on input services actually required to be used in providing taxable services to be exported. I find inconsistency between the order of the adjudicating authority and that of the appellate authority. Whereas the adjudicating authority states that the bills of input services are of a period which has nothing to do with the period of export; on the other hand, the appellate authority is doubting the very fact of actual use of the input service in the service exported. From the adjudicating authoritys order, I find that no doubt regarding actual use, as has been raised. The fact that the date of input service invoices need not be of the same date or of around the same date as the date of the export is a very natural and normal phenomena. When the whole process of receiving input service and providing output service is a continuous on-going process, it is quite natural that there will be time lag. In fact this is exactly with the Boards Circular No. 120/01/2010/Service Tax says As regards the quarterly filing of refund claims and its applicability, since no bar is provided in the notification, there should not be any objection in allowing refund of credit of the past period in subsequent quarters. It is possible that during certain quarters, there may not be any exports and therefore the exporter does not file any claim. However, he receives inputs/input services during this period. To illustrate, an exporter may avail of Rs.1 crore as input credit in the April June quarter. However, no exports may be made in this quarter, so no refund is claimed. The input credit is thus carried over to the July-September quarter, when exports of Rs.50 lakh and domestic clearances of Rs.25 lakh are made. Therefore, the order of the Commissioner (Appeals) rests on unfounded allegation and is to be rejected. The appellants have been providing all the details of input service and the output service and a major portion of the refund claim amounting to Rs.9,08,188/- was sanctioned based on same facts of use of input services for providing output service. The amount of Rs.1,47,539/- was rejected only on the ground that the period of export is October, 10 whereas the period of invoice relating to input service is different. There is no requirement under Notification No. 12/05 that the period should be same or that the declaration should be filed before the date of the input invoice. Therefore, I allow the rebate claim as valid in law.
5.1 The appellant also contended that the refund claim was rejected without the proper show-cause notice proposing rejection and the whole process violates the principles of natural justice. I agree with this contention of the appellant. On having held that the refund claim is valid in law, I do not propose to discuss this issue in detail.
6. In view of the above, the appeal is allowed and the impugned order is set aside.
(Pronounced in Court) (P.S. Pruthi) Member (Technical) Sinha 5