Custom, Excise & Service Tax Tribunal
M/S. Ikanos Communication (India) Pvt. ... vs Commissioner Of Service Tax ... on 5 December, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/2531/2012-SM [Arising out of Order-in-Appeal No. 127/2012 dated 04/06/2012 passed by the Commissioner of Central Excise, (Appeal-II), Bangalore.] M/s. IKANOS COMMUNICATION (INDIA) PVT. LTD. 3RD FLOOR, CORPORATE MILLER, NO.332/1, THIMMAIH ROAD, VASANTH NAGAR, BANGALORE 560 052 Appellant(s) Versus Commissioner of Service Tax BANGALORE-SERVICE TAX 1ST TO 5TH FLOOR, TTMC BUILDING, above BMTC BUS STAND, DOMLUR BANGALORE 560071. KARNATAKA Respondent(s)
Appearance:
Shri Jayaram Hiregange, Advocate For the Appellant Dr. J. Harish, AR For the Respondent Date of Hearing: 05/12/2016 Date of Decision: 05/12/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 21361 / 2016 Per : S.S GARG The present appeal is directed against the impugned order passed by the Commissioner (A) vide his order dated 4.6.2012 vide which the Commissioner (A) has modified the Order-in-Original.
2. Briefly the facts of the case are that the appellant is a 100% EOU approved by the Software Technology Park of India, Bangalore and is providing innovative software services. They are into exporting of software development services to customers abroad. Since the appellant is engaged in the export of services, they could not utilize the CENVAT credit on input services used for providing output services and therefore they filed a refund claim pertaining to the period May 2009 to June 2009 for Rs.7,22,956/- under Rule 5 for various input services viz., air travel agency services; renting of immovable property service; management, maintenance or repair services; rent-a-cab services; information technology software services; manpower recruitment or supply services; management or business consultants services; outdoor caters service; transport of goods by road services; works contract; architect services; business support services; business auxiliary services; cleaning services; chartered accountant services; cha services; development and supply of content services; franchisee services; insurance auxiliary services; internet telecommunication services; security services; technical testing, inspect and certification services; tour operator services; and transport of goods by air services. Thereafter a show-cause notice was issued to the appellant proposing to reject the refund claim on various grounds. The original authority had only granted refund of Rs.26,490/- on telecommunication and internet services and Rs.2,17,449/- on renting of immovable property and rejected the balance of the refund claim on various grounds. Aggrieved by the said order, the appellant filed appeal before the Commissioner (A) who also partly allowed the appeal and denied the refund on certain services on the ground that they do not impact the efficiency in provision of output service. Aggrieved by the said order, the appellant has filed the present appeal.
3. I have heard the learned counsels for both the parties and perused the records.
4. Learned counsel for the appellant submitted that the impugned order rejecting the refund claim filed for the period May 2009 to June 2009 is not sustainable in law as the same has been rejected without appreciating the law and the judgments relied upon by the appellant which conclusively held that these services are input services. In support of each service, the appellant has given justification as well as the decisions relied upon by him in support of his submission that the said service is an input service. The appellants contention and decisions relied upon are tabulated as below:
Sl. No. Input Service Justification of the appellant Decisions Relied upon 1 Air Travel Agent Service These services are availed by the Appellant in connection with the business travel of its employees such as to attend client meetings, workshops and training programs.
Manhattan Associates (India) Development Centre (P.) Ltd. Vs. Commissioner of Service Tax, [2015] 63 taxmann.com 152 (Bangalore - CESTAT);
Megma Design Automation (1) Pvt. Ltd. 2015 (40) S.T.R. 800 (Tri. -Bang.), Emcon Technologies India Pvt. Ltd. v. CC: 2013 (31) S.T.R. 441 (Tri.Bang.), Vidyut Metallics P. Ltd. 2016 (42) S.T.R. 321 (Tri. - Mumbai) 2 Business auxiliary services These services are availed for marketing and advertisement in relation to the output services provided. The Appellant submits that these services are essential and connected with the operations of the Appellant.
Apotex Research Pvt. Limited v.
Commissioner 2015 (3) TMI 346 -
CESTAT BANGALORE Pokarna Ltd. 2013 (292) E.L.T. 316 (Tri. - Bang.) CST, Bangalore Vs Jubilant Biosys Ltd 2016 (42) S.T.R. 729 (Tri. - Bang.) 3 Chartered Accountants Services These services are in the nature of statutory compliance, internal audit fees, statutory fees, appellant submits that the said services are directly covered within the preview of input service definition under the limb of accounting, auditing.
Appellant wishes to rely upon the decision of M/s Heartland Bangalore Transcription Services (P) Ltd Vs CST 2011 (21) STR 430 (Tri- Bang. Wherein it was held that Professional Services of consultants are used for assisting the assessee in complying with various statutory provisions. Therefore the appellant is rightly entitled for refund of the same.
4Clearing and forwarding agents services and CHA Services These services are used by the appellant, on IUT transfer of Machinery and equipments during the course of shifting the appellants premises from Hyderabad to Bangalore. Further these services also include de-
bonding services. Without such shifting the appellant could not have rendered the taxable services, therefore the appellant is entitled for refund of the same.
Apotex Research Pvt. Limited v.
Commissioner 2015 (3) TMI 346 CESTAT BANGALORE Pokarna Ltd. 2013 (292) E.L.T. 316 (Tri. - Bang.) CST, Bangalore Vs Jubilant Biosys Ltd 2016 (42) S.T.R. 729 (Tri. - Bang.) 5 Companies Secretaries Services These services are in the nature of statutory compliance, with Companies Act.
Appellant wishes to rely upon the decision of M/s Heartland Bangalore Transcription Services (P) Ltd Vs CST 2011 (21) STR 430 (Tri- Bang. Wherein it was held that Professional Services of consultants are used for assisting the assessee in complying with various statutory provisions. Therefore the appellant is rightly entitled for refund of the same.
6Courier Agency Services These services are used for couriering the documents and test, report to the client. These services are very much necessary for the appellant to render output services. Therefore the appellant is entitled for refund of these services. Apotex Research Pvt. Limited v.
Commissioner 2015 (3) TMI 346 CESTAT BANGALORE Pokarna Ltd. 2013 (292) E.L.T. 316 (Tri. - Bang.) CST, Bangalore Vs Jubilant Biosys Ltd 2016 (42) S.T.R. 729 (Tri. - Bang.) 7 Development and Supply of Content Services These services are in relation to software services, wherein the appellant uses these services for testing of PCB's, wherein such PCB's are used to perform its taxable service. Therefore the appellant is entitled for such refund.
Apotex Research Pvt. Limited v.
Commissioner 2015 (3) TMI 346 CESTAT BANGALORE Pokarna Ltd. 2013 (292) E.L.T. 316 (Tri. - Bang.) CST, Bangalore Vs Jubilant Biosys Ltd 2016 (42) S.T.R. 729 (Tri. - Bang.) 8 Franchise services These services are nomenclated as franchisee services, whereas these services actually are in respect of employing contracted technical engineers hired for rendering the output services. The nature of service rightly falls within the preview of Manpower recruitment services. These services directly fall within the preview of input service definition under the limb of recruitment services.
Appellant wishes to rely upon the decision of M/s Dell International Service India Pvt Ltd Vs CCE Bangalore- 2010 (17) STR 540 Tri- Bang) 9 General Insurance Services These services are in repect of machinery and equipment and laptops. Furhter the said insurance is also in terms of industries practice. Therefore the appellant is entitled for credit and refund of the same. Rearden Commerce India (P.) Ltd. [2016] 66 taxmann.com 255 (Bangalore -
CESTAT) 10 Transportation of goods by Road As a part of software development, they need to do testing on certain equipments. These services are used for transporting those equipments for calibrating. Which is very essential for rendering the output service, therefore the appellant is entitled lot refund on the same.
EMCON Technologies India (P.) Ltd.
[2013] 31 taxmann.com 15 (Bangalore CESTAT) 11 Outdoor catering These services are used for providing lunch to the employee during the office hours. Appellant wishes to rely upon the decision of CCE Vs. M/s Ultratech Cements, 2010 TIOL 745 HC Mumbai, had held that CENVAT Credit and also in case of Affinity Express India P. Ltd., Vs. CCE 2011 (22) STR 177 (Tri ) and also CCE Vs Ferromatik Milacron India Ltd 2011 (21) STR 8 (Guj) have held that cenvat credit on catering services for employees is available as cenvat credit. As the said services are used for providing meals to the employees during office hours. Therefore the activity is in relation to business and the appellant is entitled for refund of the same.
12Transport of goods by air These services are used for C&F agent service, in respect of import of equipment and machinery, documents etc which is used for carrying out the output service. Further this service will also involve shipment charges on imports, since these services are very essential for rendering the output service. Therefore, the appellant is entitled for refund of the same. Apotex Research Pvt. Limited v.
Commissioner 2015 (3) TMI 346 CESTAT BANGALORE Pokarna Ltd. 2013 (292) E.L.T. 316 (Tri. - Bang.) CST, Bangalore Vs Jubilant Biosys Ltd 2016 (42) S.T.R. 729 (Tri. - Bang.) 13 Works contract services These services are used for installation of electrical items at 3rd and 4th floor lab. The appellant requires such installation in its lab to render output services. Therefore the appellant is entitled for refund of the same. Red Hat India (P.) Ltd. vs. Principal Commissioner, Service Tax, Commissionerate, Pune [2016] 70 taxmann.com 132 (Mumbai - CESTAT)
5. On the other hand, the learned AR reiterated the findings of the impugned order. He further submitted that out of this said input services transport of goods by air is not an input service and therefore the appellant is not entitled to refund of CENVAT credit on input services of transport of goods by air.
6. After considering the submissions made by both the parties and the judgments cited supra, I am of the opinion that except for transport of goods by air, all other services on which refund has been denied on the ground that the said services are not input service is wrong and therefore, I set aside the impugned order by allowing the appeal of the appellant except transport of goods by air and for other services, the appellant is entitled to the said refund. With these modifications, the appeal is partly allowed with consequential relief, if any.
(Operative portion of the Order was pronounced in Open Court on 05/12/2016.) S.S GARG JUDICIAL MEMBER rv 8