Custom, Excise & Service Tax Tribunal
M/S. Vanu India Private Limited vs Commissioner Of Service Tax on 28 February, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH
BANGALORE
Appeal(s) Involved:
ST/20271 to 20282 & 20285 to 20287/2015-SM
[Arising out of Order-in-Appeal No. 723-727/2014 dated 30.10.2014; OIA No.733-739/2014 dated 31.10.2014; and OIA No.753-755/2014 dated 7.11.2014 passed by the Commissioner of Central Excise (Appeals-II), Bangalore.]
M/s. Vanu India Private Limited
Appellant(s)
Versus
Commissioner of Service Tax
Bangalore Commissionerate
Bangalore.
Respondent(s)
Appearance:
Mr. Jatin Christopher, CA
For the appellant
Mr. Mohammed Yousuf, AR
For the respondent
Date of Hearing: 22/02/2017
Date of Decision: 28/02/2017
CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER
Final Order No. 20274 - 20288_ / 2017
Per : S.S GARG
The appellants have filed 15 appeals directed against the three impugned orders vide Order-in-Appeal No. 723-727/2014 dated 30.10.2014; OIA No.733-739/2014 dated 31.10.2014; and OIA No.753-755/2014 dated 7.11.2014 whereby the Commissioner (A) has rejected the refund claims of the appellant under Rule 5 of CENVAT Credit Rules, 2004 on the ground that no export has taken place from the Gurgaon unit (branch office), as such, no refund was allowed on input services availed at Gurgaon unit and consequently, lack of nexus between the input services received and output services exported. Since the issue involved in all the 15 appeals is common, therefore all the 15 appeals are being disposed of by this common order.
2. Briefly the facts of the case are that the appellant is a private limited company wholly owned subsidiary of Vanu International USA and is engaged in the business of exporting the service classifiable under Information Technology Software Service (ITSS) and Business Auxiliary Service (BAS) to its parent company and they are registered under the category of Consulting Engineer; Erection, Commissioning and Installation service; transport of goods by road service; information technology software service and BAS. The appellants have filed various refund claims as stated in the table below under Rule 5 of CCR read with Rule 5 of 2006.
Appeal No.
Period
Amount (Rs.)
ST/20271/2015
April - June 2008
77,581
ST/20272/2015
July September 2008
2,489
ST/20273/2015
October December 2008
2,840
ST/20274/2015
January March 2009
29,365
ST/20275/2015
April June 2009
1,896
ST/20276/2015
July September 2009
1,11,417
ST/20277/2015
October December 2009
50,475
ST/20278/2015
January March 2010
31,514
ST/20279/2015
April June 2010
26,148
ST/20280/2015
July September 2010
49,741
ST/20281/2015
October December 2010
-
ST/20282/2015 January March 2011
-
ST/20285/2015 April June 2011 8,115 ST/20286/2015 July September 2011 9,103 ST/20287/2015 October December 2011 9,515 2.1 The Assistant Commissioner of Service Tax vide various Orders-in-Original has rejected the claims on the ground that no export has taken place from Gurgaon unit and the nexus between the input services received and output services exported could not be established by the appellant. Aggrieved by the said orders, appellant filed appeals before the Commissioner (A) and the learned Commissioner (A) vide various Orders-in-Appeal rejected the appeals on the same ground on which the adjudicating authority had rejected the claim. Hence, the present appeals.
3. Heard both the parties and perused the records.
4. Learned counsel for the appellant submitted that the impugned orders passed by the learned Commissioner (A) are not sustainable in law as the same have been passed contrary to the settled legal position as well as contrary to the statutory provision and the decisions rendered by the higher judicial fora. He further submitted that under Rule 4 of the Service Tax Rule, 1994, an option is provided to the assessee to take registration at only one premises even if the taxable service are provided from more than one premises provided the centralized billing or accounting system is followed. He further submitted that the appellant provides taxable services from two locations and as centralized accounting and billing system unit at Bangalore and as such have obtained centralized registration under the service tax laws only at Bangalore unit. He also submitted that even though the taxable services are provided from both the locations, the export invoices are raised only at Bangalore unit as it has the centralized accounting and billing system and raising of export invoices only from Bangalore unit does not infer that no services have been exported from Gurgaon unit. He further submitted that the Bangalore unit of the appellant is registered as a Software Technology Park (STP) unit engaged in providing IT/ITS services and accordingly monthly SOFTEX returns are being filed by the appellant. The turnover relating to ITSS alone is disclosed in the monthly SOFTEX as only technology software service is provided from the Bangalore unit and Business Auxiliary Service is disclosed in the monthly SOFTEX filed with the STPI. He further submitted that the refund has been denied in respect of certain input services on the ground that the same does not fall in the definition of input service. He also submitted that the learned Commissioner (A) has narrowly interpreted the definition of input service whereas the definition of input service has a very wide import and the inclusive part of the definition reads and includes services used in relation to modernization, renovation or repairs of a factory, premises of the provider of the output service or an office related to such factory or premises. It means, the maintenance and repair service have specifically been included in the input service definition and similarly with respect to other input services for which the refund has been rejected have been held to be input services by various decisions of the Tribunal and the High Court as the said services are related to the business of the company and are directly utilized by the company for efficiently providing the taxable output services. In support of his submissions, he relied upon the following decisions:
(i) Nuance Transcription Services India Pvt. Ltd. vs. CST: 2015 (39) STR 241 (Tri.-Bang.)
(ii) Megma Design Automation India Pvt. Ltd. vs. CST: 2015-TIOL-1845-CESTAT-BANG.
(iii) CST vs. Jubilant Biosys Ltd.: 2016 (42) STR 729 (Tri.-Bang.)
(iv) Xilink India Technology Services vs. CCE: 2016 (43) STR 438 (Tri.-Hyd.)
5. On the other hand, the learned AR reiterated the findings of various impugned orders and submitted that the appellant have not submitted sufficient document to prove that the export of service has taken place for Gurgaon unit as claimed by the appellant. He further submitted that the turnover relating to BAS is not disclosed in the monthly SOFTEX filed with the STPI. He further submitted that in the absence of conclusive proof to the effect that the appellant had exported taxable service from Gurgaon; the learned Commissioner (A) has upheld the findings of the lower authority.
6. After considering the submissions of both the parties and perusal of the material on record and various decisions cited by the learned consultant for the appellant, I am of the view that the findings in the impugned orders that the appellants have failed to disclose the export turnover relating to BAS in the monthly SOFTEX filed with the STPI, is not sustainable in law, further, I find that the appellant has been raising the export invoices only at Bangalore unit as it has a centralized accounting and billing system in force and the same is permissible under Rule 4 of the Service Tax Rules, 1994. Further, I also find that in the SOFTEX return, only export of software services is disclosed, as the Bangalore unit is registered as a software technology park of India. The BAS provided from Gurgaon unit is not disclosed in the monthly SOFTEX filed with the STPI as the Gurgaon unit is not registered with Software Technology Park. Therefore, only on this ground the refund is wrongly rejected. Further, as far as lack of nexus with regard to the input service viz., parking and cafeteria rent; building maintenance and housekeeping; book keeping; financial services; internet and telephone services, all these services are necessary for running of the business and are held to be input services in the decisions cited supra. Therefore, I hold that these input services fall in the definition of input service and the appellants are entitled to refund of the same.
7. In view of the discussions above, all the appeals are allowed by way of remand with a direction to the original authority to consider all the documents which may be produced by the appellant in proof of export of service from their Gurgaon unit and thereafter, pass a fresh order keeping in view the decisions of the Tribunal and the findings recorded by me wherein in principle I have held that all these services are input services. Further, I also direct the adjudicating authority to quantify the claim of the appellant after verifying documents and satisfaction of other conditions as stipulated vide Board Circular No.120/01/2010-ST dated 19.1.2010. Accordingly, all the appeals are allowed by way of remand.
(Order was pronounced in Open Court on 28/02/2017.) S.S GARG JUDICIAL MEMBER rv 8