Custom, Excise & Service Tax Tribunal
The Commissioner Of Central Excise vs M/S Dell International Services India ... on 12 April, 2013
THE CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
SOUTH ZONAL BENCH, WTC BUILDING, FKCCI COMPLEX,
K.G. ROAD, BANGALORE
Date of hearing: 12.04.2013
Date of decision: 12.04.2013
Application No: ST/490/2012,
Appeal No: ST 773/2012
(Arising out of order-in-appeal No. JMJ/78/2011 dated 27.12.2011 passed by the Commissioner (Appeals), LTU Bangalore)
For approval and signature
Honble Mr. P.G. Chacko, Member (Judicial)
Honble Mr. B.S.V. Murthy, Member(Technical)
1.
Whether Press Reporters may be allowed to see 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 CESTAT (Procedure) Rules 1982 for publication in any authoritative report or not?
3.
Whether Their Lordships wish to see the fair copy of the Order
4.
Whether Order is to be circulated to the Departmental authorities
The Commissioner of Central Excise,
Bangalore ....Appellant
Vs.
M/s Dell International Services India (Pvt)Ltd. Respondent
Present for the Assessee : Mr.Ganesh Haavanur, A.R. Present for the Revenue: Mr. Harish, Adv Coram:
Honble Mr. P.G. Chacko, Member (Judicial) Honble Mr. B.S.V. Murthy, Member(Technical) ORDER No______________________ (Per P.G. Chacko) This application filed by the department(appellant) seeks stay of operation of the impugned order. After examining the records and hearing both sides, we are of the view that the appeal itself requires to be summarily disposed of. Accordingly, after rejecting the stay application, we proceed to deal with the appeal.
2. The respondent had claimed refund of unutilized CENVAT credit of over Rs. 4 crores taken on various services which were claimed to be input services used for providing the output service exported. The original authority granted refund partially. Aggrieved by rejection of refund to the extent of Rs. 2.3 crores, the party preferred an appeal to the Commissioner(Appeals). The appellate authority framed the issue thus: Whether the appellants are eligible for the rebate in terms of notification 12/2005-ST dated 19.4.2005 in respect of service tax paid on input services used in taxable services during October 2007 to March 2008. The appellate authority framed one more issue which required to be resolved for the purpose of a decision on the aforesaid issue. This additional/subsidiary issue reads thus: Whether the input services on which the rebate claim is fiiled in terms of notification 12/05-ST dated 19.4.2005 is basically used in or in relation to the output service provided and exported under Export of Service Rules 2005. The learned Commissioner (Appeals) then proceeded to decide whether the respondent was eligible for rebate. She found that the copies of the relevant invoices were produced by the party and the registration Nos. of the input service providers were also furnished by them wherever the registration Nos. were not shown in the invoices. On this basis, the learned Commissioner (Appeals) observed that, if the party adduced documentary evidence of payment of service tax by the input service providers and established a direct nexus between the input services and the output service, rebate could be granted. The appellate authority further observed that the issue could be best addressed by resorting to the procedure prescribed under Board Circular No. 120/1/2010-ST dated 19/1/2010. Accordingly, the original authority was directed to allow refund by following the said procedure.
3. The chief ground of the present appeal of the department is that the learned Commissioner (Appeals) did not have the power of remand and hence her order remanding the case to the lower authority for fresh decision is not sustainable in law. The learned Addl. Commissioner (A.R.) reiterates this ground on the strength of the Honble Supreme Courts judgment in Mil India Ltd Vs Commissioner of Central Excise Noida [2007(210)E.L.T. 188(SC)] and the Honble Punjab and Haryana High Courts judgment in Commissioner of Customs, Amritsar Vs. Enkay (India) Rubber Co. Pvt. Ltd. [2008(224)ELT 393 (P&H)]. The learned counsel for the respondent has endeavoured to argue in support of the appellate Commissioners order.
4. After Giving careful consideration to the submissions, we are of the view that the case has to be reconsidered by the Commissioner (Appeals). The impugned order suffers from many an infirmity. Even the corrigendum to the said order does not cure many of the infirmities. The learned Commissioner(Appeals) appears to have proceeded on the premise that the Boards circular No. 120/1/2010-ST dated 19/1/2010 which provides for a method to determine nexus between input service and output service required to be ascertained for the purpose of refund claim under Notification No. 5/2006-ST. What the Circular has provided is that the claimant should declare such nexus and, where the refund claim exceeds Rs. 5 lakhs, a certificate of the Statutory Auditor be produced in support of such declaration. The Circular per se does not provide any short-cut to determine nexus between input service in respect of which refund is claimed and the output service exported. The claimant should establish that the input service was used for providing the output service. Whether the input services in question were so used was not examined by the Commissioner (Appeals). She wanted this question to be examined afresh by the original authority. In other words, the substantive issue was virtually remanded to the original authority, for which the Commissioner (Appeals) did not have statutory power as per the legal position proclaimed by the Honble Supreme court in the case of Mil India Ltd. (supra). As per the ruling of the apex court, the Commissioner (Appeals) should have stepped into the shoes of the adjudicating authority for the purpose of deciding on the substantive issue. After such decision, the quantum of refund, if any, could have been either determined by the Commissioner (Appeals) or directed to be determined by the original authority. In any case, the substantive issue could not have been remanded by the Commissioner (Appeals).
5. In the above view of the matter, we set aside the impugned order and allow this appeal by way of remand to the Commissioner (Appeals) with a request to take a decision on the nexus issue after giving the party a reasonable opportunity of adducing evidence and being personally heard. It is made clear that the relevant procedure embodied in the Boards Circular be followed for quantification of the refund if any.
6. The stay application also stands disposed of.
(Pronounced and dictated in open court.)
(B.S.V.MURTHY) (P.G.CHACKO)
Member(Technical) Member(Judicial)
pnr
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