Custom, Excise & Service Tax Tribunal
Capgemini Technology Service India ... vs Commissioner Central Goods And Service ... on 25 April, 2023
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
REGIONAL BENCH - COURT NO. 01
Service Tax Appeal No. 87513 of 2018
(Arising out of Order-in-Original No. ME/COMM/VR/45 TO 51/2017-18 dated
14.03.2028 passed by Commissioner of GST & Central Excise, Mumbai East,
Commissionerate, Mumbai. )
Capgemini Technology Service India .....Appellant
Limited
Ackruti Softech Park, MIDC Cross Road No 21,
Andheri, Mumbai-400093.
VERSUS
Commissioner of Central Goods .....Respondent
and Service Tax- Mumbai East 9th Floor, Lotus, Parel Station East Mumbai-400012.
Appearance:
Shri Sanjeev Nair, Advocate for the Appellant Shri Piyush Badhe, Authorized Representative for the Respondent CORAM:
HON'BLE MR. S.K. MOHANTY, MEMBER (JUDICIAL) HON'BLE MR. M.M.PARTHIBAN, MEMBER (TECHNICAL) FINAL ORDER NO. A/85863/2023 Date of Hearing: 25.04.2023 Date of Decision: 25.04.2023 PER : S. K. MOHANTY Brief facts of the case are that the appellants herein are engaged in provision of Information Technology Services, Software Testing Services to their various clients both within the country as well as abroad. Such services provided by the appellants are defined as taxable service under the Finance Act, 1994. For provision of the output services, the appellants procured various input services and availed Cenvat credit of service tax paid on such services in terms Service Tax Appeal No. 87513 of 2018 2 of the provisions contained in Cenvat Credit Rules, 2004. The Cenvat Credit availed by the appellants during the period April, 2006 to March, 2015 was sought to be denied by the department on the ground that those services have no nexus with the output services provided by the appellants and as such, those services cannot be considered as input service as per the definition contained in Section 2(l) ibid. The show cause notices issued in this regard for the said period were adjudicated vide the impugned order dated 14.03.2018, wherein the original authority has allowed Cenvat credit amounting to Rs.30,46,93,426/- on certain input services and denied the credit in respect of other services amounting Rs.13,19,96,912/- by upholding the allegations levied in the show cause notices that there is no nexus between input services and the output services provided by the appellants. Feeling aggrieved with the impugned order, insofar as it has denied the cenvat benefit of Rs.13,19,96,912/-, the appellants have preferred this appeal before the Tribunal.
2. Learned Advocate appearing for the appellants submitted that the learned Adjudicating Authority has not examined the invoices properly in respect of which the Cenvat credit was availed by the appellant. Further, he submitted that for the subsequent period i.e. 2015-2017, on the same set of facts, the successor adjudicating authority has dropped the proposals made in the show cause notice, holding that there is establishment of nexus between the input services and the output services provided by the appellants. Thus, learned Advocate submitted that the present impugned order is a classic case of non-application of mind inasmuch as no documentary evidence were examined in their proper perspective and they relied upon judgments which were not considered in order to arrive at the Service Tax Appeal No. 87513 of 2018 3 decision regarding lawful entitlement of the credit to the appellants. In support of entitlement of Cenvat credit on disputed services, learned Advocate has relied upon the following judgments delivered by the judicial forum:-
Sr. Heads of Services Reference of Judgments No
1. Management, Orient Bell Limited vs Commissioner maintenance and repair of Central Excise, Noida, 2017 (42) service STR 60 (Tri-All.);
2. Rent a cab service Union of India vs Martin Lottery Agencies Ltd. 2009 (14) STR 593 (SC)
3. General Insurance Atlas Documentary Facilitators Services Company (P) Ltd vs C.S.T., Mumbai-
I, reported in 2017 (50) S.T.R. 22 (Tri.-Mumbai);
4. Erection commission or Lifelong Meditech Ltd. vs. CCE & S.T., installation services Gurgaon-II 2016 (44) S.T.R 626 (Tri.-Chan.)
5. Event Management Accenture Services Pvt. Ltd. vs. Services Commissioner of ST, Mumbai, 2015 (40) S.T.R 719 (Tri.-Mumbai);
6. Interior Decoration Reliance Industries Ltd. vs Services Commissioner of C.Ex. & S.T., LTU, Mumbai, 2016 (45) STR 383 (Tri.-
Mumbai);
7. Architect's services Maruti Suzuki India Pvt. Ltd. vs. CCE 2017 (47) STR (Tri.-Del)
8. Photography services Microsoft Global Services Centre (I) Pvt. Ltd. vs C.C.Ex. Hyderabad IV 2021 (44) G.S.T.L. 264 (Tri.-Hyd.)
9. Construction Services Carrier Air conditioning & Refrigeration Ltd. vs C.C.E., Delhi-IV, 2016 (41) STR 824 (Tri.-Chan.);
3. On the other hand, learned Authorized Representative appearing for the Revenue, reiterated the findings recorded in the impugned order.
Service Tax Appeal No. 87513 of 2018 4
4. Heard both sides and examined the case records.
5. We find that the learned adjudicating authority has confirmed the adjudged demands under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 73 of the Finance Act, 1994. He has denied the Cenvat benefit to the appellants on the ground that there is no nexus between the input services and the output services provided by the appellants. Insofar as the nexus aspect is concerned, it is incumbent upon the original authority to examine not only the invoices, but also the nature of services and their participation or use in the provision of the output service. We find that the original authority has not thoroughly examined the documentary evidences and other aspects in support of denial of the benefit of Cenvat credit to the appellants. Further, we also find that the disputed services involved in this case were also involved in the subsequent period 2015-17 and upon proper analysis of the documentary evidences, the original authority vide order dated 06.05.2022 has allowed the Cenvat benefit to the appellants. On minute study of both the orders, we do not find any justification as to how and under what circumstances the Cenvat credit on the disputed services were allowed by the adjudicating authority for the subsequent period, which were denied for the previous period. Furthermore, it has also been noticed that the judgments relied upon by the appellants have also not been considered in their proper perspective for arriving at a conclusion whether the appellants should be entitled for the credit or otherwise. Therefore, we are of the considered view that this matter is required to be re-examined at the original stage. Accordingly, the impugned order is liable to be set aside on that ground alone. In view of above, the impugned order is set aside and the appeal is allowed in favour of the appellant with a direction for Service Tax Appeal No. 87513 of 2018 5 denovo adjudication of the matter afresh, in respect of the cenvat demand confirmed in the impugned order. The original authority should properly examine the actual use/utilization of the disputed services in the provision of the output service and also the duty paying documents for a conclusion regarding lawful entitlement to the Cenvat credit by the appellants. Further, the original authority should also examine the ratio of the judgments relied upon by the appellants for a proper conclusion with regard to entitlement of credit on the disputed services. It is also expected that while passing the denovo adjudication order, the original authority should specifically discuss the issue as to how and under what circumstances for the subsequent period the benefit of Cenvat credit was allowed at the original stage. Needless to say, that reasonable opportunity of personal hearing should be granted to the appellant before passing of the denovo adjudication order.
7. In the result, the appeal is allowed by way of remand.
(Dictated and pronounced in the open court) (S. K. Mohanty) Member(Judicial) (M.M.Parthiban) Member (Technical) Sm/Yr