Custom, Excise & Service Tax Tribunal
M/S Tieto Software Technologies Ltd vs Commissioner Of Central Excise, ... on 9 December, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. ST/87754 & 87755/13 (Arising out of Orders-in-Appeal No. P-III/RP/120/2013 dated 23.04.2013 and No. P-III/RP/130/2013 dated 06.05.2013 passed by the Commissioner of Central Excise (Appeals), Pune-III). For approval and signature: Honble Shri Anil Choudhary, Member (Judicial) ======================================================
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 Tieto Software Technologies 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 ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 09.12.2014 Date of Decision: 09.12.2014 ORDER NO. Per: Shri Anil Choudhary
The Appellant is in Appeal against Order-in-Appeal dated 23.04.2013 for the period April 2011 to June 2011 and Order-in-Appeal dated 06.05.2013 for the period July 2011 to September 2011 whereby refund claims of Rs.8,95,744 and Rs.13,11,123 respectively have been rejected.
2. I have perused the appeal papers with the assistance from the Ld Counsel for the Appellant and the Ld. AR.
3. The Ld. Counsel appearing for the Appellant submits that the reason for rejection of refund was that the invoices received from the Appellants overseas entity viz. Tieto Finland, were defective as it did not indicate the category of service and the same were not signed. He further submits that, it was held in the impugned Orders-in-Appeal that the service in question was not approved by the Unit Approval Committee which is a mandatory requirement to avail refund under Notification 17/ 2011 ST dated 01.03.2011. He further submits that Appellant had received certain services from the overseas entity Tieto Finland in the nature of management, marketing, personnel, legal information technology, finance on a cost sharing basis. The overseas entity of the Appellants had raised invoices on the basis of costs attributable to the Appellants as per the Agreement entered into between the Appellants and the said group entity.
3.1 The Ld Counsel submits that the Appellants had considered these services as import of Business Support Services and have paid service tax by disclosing the accounting code 00440366 for Business Support Services in the GAR 7 challans. These payments were accepted by the Revenue under the category Business Support Services without any challenge or dispute. Thus, when the Revenue has accepted the payment made by the Appellants for receiving the services from their overseas entity under classification of Business Support Services, the same cannot be challenged or ignored at the time of sanction of refund. The Ld Counsel further submits that the authorisation dated 05 October 2009 received from the Unit Approval Committee of Special Economic Zone clearly indicate Business Support Services as one of the eligible input services to be used by the Appellants for their authorised SEZ operations.
3.2 The Ld Counsel further submitted that it is settled principle in law that once the Revenue has accepted the classification of service for receiving service tax, the same cannot be challenged at the time of grant of refund on the very same service. The said view finds support from various judicial pronouncements including in the case of Commissioner of Central Excise and Customs vs. MDS Switchgear Ltd. reported in 2008 (229) ELT 485 (SC).
3.3 The Ld Counsel further submitted that with respect to certain technical objections such as invoices not containing description of service, invoices not being signed, the provisions of service tax rules with respect to issue of invoices in specific format will apply only to service providers within the jurisdiction of service tax Act i.e. those who are located within India. In the present case the vendor of the Appellant being a group company located outside India, they are neither bound nor obliged to issue invoices as per the service tax rules in India. In any case, the Revenue has accepted service tax paid by the Appellant on such invoices and hence they cannot object to grant of refund on the very same invoices against which service tax payment has been duly accepted by the Revenue. He further submitted that there are certain observations made in the impugned orders about the correctness of the value, tax payment and its evidence. However, these objections were not raised in the show cause notice and in any case the Revenue has not challenged the correctness of service tax paid by the Appellant on reverse charge basis for receiving service from their overseas entity and at this stage these objections, are untenable.
4. The Ld. Counsel for the revenue on the other hand reiterates the findings of the lower authorities and submits that the documents provided by the Appellant does not clarify the nature of services for which the refund has been claimed and hence refund was rightly rejected.
5. I have carefully considered the submissions made by both sides.
5.1 I find that there are three issues involved in both the appeals based on which the lower Appellate Authority has rejected the refund claims of the Appellant. Those issues are: (1) deficiency in invoices (2) the objection that the impugned service is not mentioned in the authorisation issued by the Unit Approval Committee of the SEZ unit (3) that the assessee has not provided basis for payment of service tax along with the evidence of tax payment for which the refund is being claimed. I will deal with each of these issues in my order.
5.2 With respect to deficiency noted in the invoice, it is observed that the said invoices are issued by the vendor located outside India, who is not required to follow the procedure prescribed under the Service Tax Rules, 1994.
5.3 In any case, mere technical discrepancies in the invoices cannot be the ground for denying substantive benefit of refund available to an SEZ unit. It is the policy of the Government to exempt or refund the input taxes incurred by the SEZ Unit. Keeping this policy of the Government in mind and specifically in the light of sections 7 and section 51 of the SEZ Act, 2005, I find denial of refund claim on this ground is not sustainable.
5.4 With respect to the second objection that the impugned service is not approved by the Unit Approval Committee, I find that the Appellant has produced the authorisation dated 05 October 2009in which at serial no. 27 Business Support Service is specifically mentioned. I also find from the GAR 7 challan enclosed to the Appeal that service tax was paid by the Appellant under the accounting code 00440366 which is the accounting code for depositing service tax under Business Support Service category. When the Revenue has accepted service tax payment made by the Appellant under the accounting code of Business Support Service, and when the Business Support Service is included in the authorisation dated 05 October 2009 granted by the Unit Approval Committee, the objection on this count is also not tenable.
5.5 With regard to the third objection of reconciliation of service tax payment with evidence of challans, I find that the same was produced before the lower authority and also before me and the same is satisfactory. In view of the above findings, the Appellant succeeds in the present appeal. Accordingly, the appeals are allowed with consequential relief, if any, in accordance with law.
(Pronounced in Court) (Anil Choudhary) Member (Judicial) Sinha 5