Custom, Excise & Service Tax Tribunal
Estire Research & Analytics Private ... vs Assistant Commissioner-Navi Mumbai on 14 February, 2023
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, MUMBAI
REGIONAL BENCH
Single Member Bench
Service Tax Appeal No. 87795 of 2018
(Arising out of Order-in-Appeal No. MKK/349-351/RGDAPP/2017 dated
19.12.2017 passed by the Commissioner of Central Tax, Central Excise &
Service Tax (Appeals), Raigad)
M/s. Estire Research & Analytics Pvt. Ltd. Appellant
B-202, Supreme Business Park,
Supreme City, Hiranandani Gardens,
Powai, Mumbai 400 076.
Vs.
Commissioner of CGST, Navi Mumbai Respondent
10th Floor, Satra Plaza, Palm Beach Road, Sector 19D, Vashi, Navi Mumbai 400 705.
WITH Service Tax Appeal No. 88243 of 2019 (Arising out of Order-in-Appeal No. MKK/349-351/RGDAPP/2017 dated 19.12.2017 passed by the Commissioner of Central Tax, Central Excise & Service Tax (Appeals), Raigad) M/s. Estire Research & Analytics Pvt. Ltd. Appellant B-202, Supreme Business Park, Supreme City, Hiranandani Gardens, Powai, Mumbai 400 076.
Vs. Asstt. Commissioner, Navi Mumbai Respondent 10th Floor, Satra Plaza, Palm Beach Road, Sector 19D, Vashi, Navi Mumbai 400 705.
AND Service Tax Appeal No. 88244 of 2019 (Arising out of Order-in-Appeal No. MKK/349-351/RGDAPP/2017 dated 19.12.2017 passed by the Commissioner of Central Tax, Central Excise & Service Tax (Appeals), Raigad) M/s. Estire Research & Analytics Pvt. Ltd. Appellant B-202, Supreme Business Park, Supreme City, Hiranandani Gardens, Powai, Mumbai 400 076.
Vs. Asstt. Commissioner, Navi Mumbai Respondent 10th Floor, Satra Plaza, Palm Beach Road, Sector 19D, Vashi, Navi Mumbai 400 705.
Appearance:
None for the Appellant 2 ST/87795/2018,88243,88244/2019 Shri Prabhakar Sharma, Superintendent, Authorised Representative for the Respondent CORAM:
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) Date of Hearing: 14.02.2023 Date of Decision: 14.02.2023 FINAL ORDER NO. 85767-85769/2023 Appellant had preferred three refund claims which were modified by the original authority vide his orders as detailed in table below:
S Order in Original No Refund amount Period of Refund
No rejected
1 AC/R-95/Dn-1/ST-VII/BNP/16- Rs 6,43,256/- January 2015 to
17 dated 30.11.2016 March 2015
2. AC/R-81/Dn-1/ST-VII/BNP/16- Rs 2,66,033/- April 2015 to June
17 dated 30.11.2016 2015
3. AC/R-83/Dn-1/ST-VII/BNP/16- Rs 3,23,287/- July 2015 to
17 dated 30.11.2016 September 2015
2. Appellant challenged these orders before the
Commissioner (Appeals). Commissioner (Appeals) in para 4 of the impugned order noted the grounds of appeal as follows:
a. With respect to the rejection of refund claim on the ground that input service invoices are not addressed to the registered premises of the appellants, they contended that availment of CENVAT credit of service tax paid on inputs services is governed by Rule 3 (1) of the CCR read with Rule 9(1) & (2) of the said Rules. there is no provision in said rules that for availing Cenvat credit premises should be registered.
b. With respect to the rejection of refund claim on the ground that input service has no nexus with the output service, the appellant has contended that such input services are not excluded from the definition of input services as contained in rule 2 (l) of CCR (In the appeal) mentioned at Sl No 1 & 3 of Table -I ) c. With respect to denial of refund of Rs 1510/- the appellant 3 ST/87795/2018,88243,88244/2019 has stated that the said credit has been taken on two different invoices."
3. In para 6 of the impugned order he reframes the question stating as follows:
I. Whether the CENVAT Credit is admissible on invoices not addressed to the registered premises of the appellant?
II. Whether work contracts service cargo handling services and Hotel services availed by the appellant have any nexus with the output services provided by them?
III.Whether credit of Rs 1510/- availed by the appellant is correct or otherwise?
4. In para 13, he modifies the order in original to the extent of allowing the claim in respect of Cargo handling Services and that mentioned at III above. Aggrieved appellants have filed this appeal.
5. Matter has been list considerable number of times.
However none appeared. Therefore in terms of Rule 20, the matter has been taken up for consideration ex-parte after hearing the authorized representative for revenue, who reiterated the findings recorded in the impugned orders.
6. I find that issue involved in the matter is in respect of Refund claims filed under Rule 5 of CENVAT Credit Rules,2004 and not in terms of Rule 14 of the CENVAT Credit Rules, 2004. It has been constantly held that proceedings for disallowance of CENVAT credit has to be initiated in terms of Rule 14 of the CENVAT Credit Rules, 2004 and determined thereunder. This cannot be reason for modifying the refund claims filed in terms of Rule 5, ibid. reliance is placed on the decisions in case of BNP Paribas India Solution Pvt. Ltd. [2022 (58) G.S.T.L. 539 (Tri. - Mumbai)] holding as follows:
"5. I have heard Learned Counsel for the Appellant and Learned Authorised Representative for the Revenue and perused the case records including the written submission and the case laws filed by the respective sides. There is no doubt that Rule 5 ibid provides for refund of accumulated Cenvat credit subject to compliance of the procedure/guideline laid down under the notifications issued thereunder. The refund of Cenvat credit on 4 ST/87795/2018,88243,88244/2019 the services in issue was mainly denied to the Appellant on the ground of 'no nexus' between the input services and the export services. The issue which falls for consideration in these Appeals is whether the department can deny refund of Cenvat credit under Rule 5 ibid alleging that there was no nexus between the output and input services. It is well settled legal position that denial of Cenvat credit can be done only by issuing notice under Rule 14 ibid. Having allowed the Cenvat credit or by not denying the same, the department cannot reject refund of Cenvat credit under Rule 5. It is well settled principle that availment of Cenvat credit, its utilisation and refund are different aspects dealt with under CCR, 2004. Rule 5 provides for any refund of Cenvat credit and nowhere in this Rule there is a provision to determine the correctness about the availment of Cenvat credit. Its only Rule 14 ibid which provides for recovery of irregularly availed Cenvat credit. I find force in the submission of Learned Counsel that since availment of credit has not been questioned by the department in terms of Rule 14 ibid, the refund benefit cannot be denied on the ground of non-establishment of nexus between input and the output services. This Tribunal in Appellant's own case on an identical issue, for the period April, 2012 to March, 2013 and April, 2016 to September, 2016 in the matter of M/s. BNP Paribas India Solutions Pvt. Ltd. v. Commissioner of CGST, Mumbai East reported in 2020 (2) TMI 224-CESTAT Mumbai, set aside the denial of refund by the department to the Appellant on the ground of non-establishment of nexus between the input and output services, after discussing Rule 5 ibid in detail. The relevant extract of the said order is as under :
"xxxx xxxx xxxx
6. Rule 5 of the Cenvat Credit Rules was substituted by Notification No. 18/2012-C.E. (N.T.), dated 17-3-2012 (w.e.f. 1- 4-2012). Under the said substituted rule, it has been provided that the manufacturer or the service provider has to claim the refund as per the formula prescribed therein. Considering such amendment of Rule 5, the Tax Research Unit of Department of Revenue vide circular dated 16-3-2012 has clarified that the new scheme under Rule 5 does not require the kind of correlation that is needed at present between exports and input services used in such exports. Since the amended rule w.e.f. 1-4-2012 5 ST/87795/2018,88243,88244/2019 does not provide for establishment of nexus between the input and the output services and the benefit of refund is to be extended only on compliance of the formula prescribed therein, I am of the view that denial of refund benefit on the ground of non-establishment of nexus cannot be sustained, I find that this Tribunal in the case of Maersk Global Services Centres (I) Pvt. Ltd. (supra) has extended the refund benefit on the ground that establishment of nexus between the input and the output services cannot be insisted upon. The relevant paragraphs in the said decision is extracted hereinbelow :
"7. In this case, the department has not disputed the fact regarding export of output service by the appellant. The dispute raised in the present case were in context with non- establishment of nexus between the input and output services, service description provided in the invoices were not confirming to the input service definition provided under Rule 2(l) ibid and the invoices were not submitted by the appellant, establishing the fact that the refund benefit should be granted to it. So far as establishing the nexus between input and the output service is concerned, I find that this Tribunal in the case of Accelya Kale Solutions Ltd. (supra) by relying upon the letter dated 16-3- 2012 of TRU has held that under Rule 5 ibid, refund of input service credit is permissible on compliance of the formula prescribed therein and not otherwise. The relevant paragraphs in the said order are extracted hereinbelow :
3. Rule 5 of Cenvat Credit Rules, 2004, was substituted vide Notification No. 18/2012-C.E. (N.T.), dated 17-3-2012, with effect from Appeal Nos. ST/88190, 88215, 88216 & 88217/2018, 1-4-2012. The said substituted rule has prescribed the formula for claiming refund of service tax by the service provider. Under such amended rule in vogue, there is no requirement of satisfying the nexus between the input services and the output service provided by the service provider. Consequent upon substitution of the said Rule in the Union Budget-2012, the Tax Research Unit (TRU) of CBEC vide letter dated 16-3-2012 has clarified as under :-
"F.1 Simplified scheme for refunds :
1. A simplified scheme for refunds is being introduced by substituting the entire Rule 5 of Cenvat Credit Rules, 2004.
6 ST/87795/2018,88243,88244/2019 The new scheme does not require the kind of correlation that is needed at present between exports and input services used in such exports. Duties or taxes paid on any goods or services that qualify as inputs or input services will be entitled to be refunded in the ratio of the export turnover to total turnover.
2. XXXX
3. XXXXX
4. On perusal of the statutory provisions read with the clarifications furnished by the TRU, it transpires that under the substituted Rule 5 of the rules, there is no requirement of showing the nexus between the input service and the output service provided by the assessee. Since the refund under the said amended rule is governed on the basis of receipt of export turnover to the total turnover, establishing the nexus between the input and output service cannot be insisted upon for consideration of the refund application."
8. In view of above, the impugned order, insofar as it has denied the refund benefit on the ground of non-establishment of nexus between the input and output services, is set aside and the appeal is allowed in favour of the appellant."
There is no dispute that the aforesaid decision of this Tribunal in appellants' own case covered both pre-and post-amendment period and also the services which are in issue herein. So far as the decision in the matter of Maersk Global (supra) is concerned, I am afraid that the Learned Authorised Representative is not correct in his submission that the said decision pertains to pre- amendment period. Similarly, while interpreting Rule 5 this Tribunal in the matter of M/s. Cross Tab Marketing Service Pvt. Ltd. v. C.C. GST, Mumbai East; reported in 2021-VIL-466- CESTAT-MUM-ST = 2021 (55) G.S.T.L. 29 (Tri. - Mumbai) vide order dated 17-9-2021 held that the amended Rule 5 ibid does not require establishment of any nexus between input and export services. The rule only provides that the admissible refund will be proportional to the ratio of export turnover of goods and services to the total turnover, during the period under consideration and the net Cenvat credit taken during that period. Indisputably, in the refund proceedings under Rule 5 ibid as 7 ST/87795/2018,88243,88244/2019 amended, any such attempt to deny or to vary the credit availed during the period under consideration is not permissible. If the quantum of the Cenvat credit is to be varied or to be denied on the ground that certain services do not qualify as input services or on the ground of 'no nexus', then the same could have been done only by taking recourse to Rule 14 ibid."
7. Further in following decisions support the submissions made by the appellant in respect of admissibility of the CENVAT Credit on the invoices not in the name of registered premises of the appellant:
a. Tata Business Support Services Ltd. [2021 (44) GSTL 169 (T-Mum)] b. mPortal India wireless solutions P Ltd. [2012 (27) STR 134 Kar] c. Allspheres Entertainment Pvt Ltd. [2016 (41) STR 104 (T- Del)] d. Manipal Advertising Services Pvt Ltd [2010 (19) STR 506 (T-Bang)] e. Toll (I ) Logistics Pvt Ltd. [2016 (41) STR 80 (T-Mum)] f. G E Exports (P ) Ltd [20166 (44) STR 693 (T-Hyd)] g. Samsung India Electronics Pvt Ltd [2017 (52) STR J 253 (ALL)]
8. In view of the decisions as above I do not find any merits in the part of impugned order holding the modification of refund claims filed by the appellant on the above grounds.
9. Appeals are allowed.
(Order pronounced in the open court) (Sanjiv Srivastava) Member (Technical) tvu