Custom, Excise & Service Tax Tribunal
M/S Cummins Technologies India Private ... vs Cce & St, Bhopal on 14 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. III DATE OF HEARING : 14/09/2016. DATE OF DECISION : 14/09/2016. Service Tax Appeal No. 52276 of 2016 (SM) [Arising out of the Order-in-Appeal No. BHO-EXCUS-001-APP-031-16-17 dated 03/05/2016 passed by The Commissioner (Appeals I), Customs, Central Excise & Service Tax, Bhopal.] For Approval and signature : Honble Shri V. Padmanabhan, Member (Technical) 1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would 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 :Seen copy of the order? 4. Whether order is to be circulated to the :Yes Department Authorities? M/s Cummins Technologies India Private Ltd. Appellant Versus CCE & ST, Bhopal Respondent
Appearance Shri Narender Singhvi, Advocate for the appellant.
Shri M.R. Sharma, Authorized Representative (DR) for the Respondent.
CORAM: Honble Shri V. Padmanabhan, Member (Technical) Final Order No. 53609/2016 Dated : 14/09/2016 Per. V. Padmanabhan :-
The present appeal is directed against the impugned order dated 03/5/16 passed by the Commissioner (Appeals), Bhopal. The appellant is a SEZ unit in Pithampur (M.P.) and is allowed to procure goods and services without payment of any tax as per the provisions of the SEZ Act and Rules. Services which are consumed by the SEZ are not required to suffer service tax in terms of Section 26 readwith Section 51 of the SEZ Act, 2005. The SEZ developers as well as SEZ units are allowed to claim refund of the service tax paid on the services provided to them for authorized operations as per various notifications issued from time to time. The present dispute is with reference to such refunds claimed by the appellant under Notification No. 40/2012-ST dated 20/6/2012, made during the period October 2011 to December 2012. The Original Authority vide his order dated 24/12/13 rejected a part of the claims made by the appellant to the extent of Rs. 3,31,549/- in respect of the following services :-
S. No. Service Amount (Rs.) Issue
1.
CHA services 1,55,243 The invoices issued by the service provider do not show charging of any Service Tax.
2. Professional services (Chartered Accountant) 87,503/-
These services are not covered in the list of approved services and thus not consumed in authorized operations.
3. Training of employees etc. 86,850/-
These services are not covered in the list of approved services and thus not consumed in authorized operations.
4. Others 1,953/-
Invoices not submitted Total 3,31,549/-
Aggrieved by such rejection, the present appeal has been filed mainly on the following grounds :-
(1) the provisions of SEZ Act, 2005 overwrite the provisions contained in any other Act including that of the Finance Act, 1994. In terms of the Section 26 readwith Section 51 of the SEZ Act, 2005 it is clearly laid down that no service tax will be payable in respect of services used by the SEZ foreign authorized operations. In the light of these provisions, Revenue should not have restricted their claim in as much as the services have been utilized by the appellants SEZ unit ;
(2) The CHA services for which the refund claim to the extent of Rs. 1.55 lakh has been rejected have been specifically declared by them to the Development Commissioner and the same stands approved by them as services used for authorized operations vide the approval of the Development Commissioner dated 23/4/2009. Hence, it cannot be disputed that the services are not covered in the list of approved services ;
(3) An amount of Rs. 1,55,243/- have been disallowed under the claim for CHA services for the reason that the invoices issued by the service provider do not show charging of any service tax. They have submitted in this regard that the CHA in turn has made use of several service providers who have all rendered service in favour of the appellant unit. The invoices issued by these service providers also clearly show that these services have been rendered to the SEZ unit. The CHA only acted as a direct agent who engaged and paid for the services and in turn collected the payment from the appellant.
They have also placed reliance on the following case laws to support their arguments :
(i) Sopariwala Exports vs. CST, Mumbai I reported in 2015 (39) S.T.R. 884 (Tri. Mumbai) ;
(ii) Madura Garments Exports Ltd. vs. CCE & ST, LTU, Mumbai reported in 2015 (39) S.T.R. 661 (Tri. Mumbai) ;
(iii) Punjab Stainless Steel Industries vs. CST, Delhi IV reported in 2015 (39) S.T.R. 243 (Tri. Del.) ;
(iv) Amar International vs. CST, Mumbai reported in 2015 (37) S.T.R. 810 (tri. Mumbai) ;
(v) Zydus Hospira Oncology Pvt. Ltd. vs. CCE, Ahmedabad reported in 2013 (30) S.T.R. 487 (Tri. Ahmd.) ;
(vi) Tata Consultancy Services Ltd. vs. CCE & ST (LTU), Mumbai reported in 2013 (29) S.T.R. 393 (Tri. Mumbai) ;
(vii) Zydus Technologies Ltd. vs. CST, Ahmedabad reported in 2015 (39) S.T.R. 657 (Tri. Ahmd.) ;
(viii) Reliance Ports and Terminals Ltd. vs. CCE & ST, Rajkot reported in 2015 (40) S.T.R. 200 (Tri. Ahmd.)
(ix) Barclays Technology Centre India (P) Ltd. vs. CCE, Pune III reported in 2015 (38) S.T.R. 35 (Tri. Mumbai) and
(x) Intas Pharma Ltd. vs. CST, Ahmedabad reported in 2013 (32) S.T.R. 543 (Tri. Ahmd.).
2. I learned DR, on the other hand, reiterates the view taken by the authorities below. He further submitted that since the invoices issued by CHA do not show the service tax paid by the service providers engaged by them, the same should be disallowed.
3. I have heard Shri Narender Singhvi, Advocate for the appellant as well as Shri M.R. Sharma, learned DR.
4. The SEZ Act, 2005 provides that services received in the SEZ and used in the authorized operations will not be liable to payment of service tax. To operationalize these provisions, various notifications have been issued from time to time providing for claiming of refund by the SEZ units and developers from the Jurisdictional Authorities. The present dispute is with reference to the Notification No. 40/2012-ST dated 20/6/2012 which prescribed the procedure for claim of these refunds and the conditions under which it should be granted. The notification broadly prescribes that refund of service tax shall be paid for services received by the unit or developer of the SEZ provided that the services are consumed within the SEZ. The services for which refund shall be paid are those which are approved by the Jurisdictional Development Commissioner of the Special Economic Zone.
5. In the present case, I find that a long list of services have been approved by the Development Commissioner vide his letter dated 23/4/2009. On a perusal of this list, I find that the Custom House Agent Services, Commercial Training and Coaching Services as well as those rendered by a practicing Chartered Accountant stand approved in this letter. The rejection of refund claims in respect of provisional services rendered by Chartered Accountant as well as those of training of employees is totally unjustified. I have perused invoices issued in respect of the CA services. There are three invoices issued to M/s Cummins India Ltd. dated 30/12/10, 17/3/11, 01/6/11, I find that all the three invoices are issued to M/s Cummins India Ltd. However, it is clearly mentioned that it is to the account of M/s Cummins Technologies India Pvt. Ltd., the appellant in the present case. In as much as these services have been rendered to the appellants SEZ unit as well as are covered in the approved list of services, I find no justification for denial of the refund.
6. In respect of CHA services I have perused a few invoices issued by CHA, viz. M/s UPS SCS (India) Private Limited. In invoice dated 12/10/11, I find the description of various services rendered. Even though no service tax amount has been shown in this invoice, I find that this invoice is accompanied by invoice dated 26/9/11 issued by M/s Seabird Marine Services Pvt. Ltd. referring to various port related services rendered in favour of the appellant and indicates payment of service tax to the extent of Rs. 797/-. The original invoice issued by M/s UPS is also accompanied by a few other invoices issued by various service providers on account of the appellant clearly indicating the service tax paid thereon. I find that the claim of refund of service tax made under such invoices by the CHA has been denied by the authorities below for the reason that the invoices issued by the service provider, i.e. CHA, do not indicate the full amount of service tax. However, it is evident that all the service providers engaged by the CHA have all render service on account of the appellant SEZ unit.
I find that similar issues have come up before the Tribunal in the past and in such cases the refund stands allowed. In the case of Punjab Stainless Steel Industries (supra) it has been held by the Tribunal as follows :-
4.?As regards the denial of refund to the appellant on the ground that the bill has been issued by the CHA and not by the service provider. I find that the issue came before the Tribunal in the case of Durhan Spintex & Holding Pvt. Ltd. v. Commissioner of Service Tax, Ahmedabad reported 2012 (28) S.T.R. 366 (Tri.-Ahmd.) wherein it was held that, what is required to be seen is whether Service Tax was paid for required service under admissible category or not. In the present case invoices issued by the CHA clearly show amount against THC as well as B.L.C. and the Service Tax had been paid on these charges by CHA. Moreover the container number is also mentioned on the invoices issued by the CHA in the name of appellant. Shipping bill number is also mentioned on the invoices of CHA. Container numbers and shipping bill number are sufficient to prove that the consignment in question was exported by the present appellant. Therefore in view of the decision by the Tribunal cited by the appellants the refund of Service Tax paid in respect of THC & B.L. Charges is admissible to them.
5.?In respect of the refund of Service Tax paid on Rail Freight and Inland Haulage Charges, invoices have been issued by the various Rail operators which clearly show the container number and name of the appellant and corresponding invoice number. The invoice number is also mentioned in the Shipping bill which can facilitate correlation of the goods with the bill submitted by the appellant. Moreover Tribunal in case of Trident Ltd. v. CCE, Chandigarh reported in 2012 (28) S.T.R. 505 (Tri.-Del.) has held that in respect of Rail Freight mentioning of container number reasonably establishes that service was in respect of export of the service and there is no reason to deny the refund on the ground that the invoices were not issued by service provider. In view of the above, appellants are eligible for the refund of the Service Tax paid by them under the Notification No. 17/2009-S.T. I set aside the Order-in-Appeal and allow the appeal.
The above decision has been rendered in the light of Notification No. 17/2009-ST, which is the predecessor to Notification No. 40/2012-ST. Similar views have been held by the Tribunal in various other cases as well. In the light of the above, I find that the issue is no more res-integra and stands settled in favour of the appellant.
7. In respect of rejection of the claim on training of employees, I have seen the three invoices dated 22/1/11, 28/11/11 and 22/12/11. All three invoices are in favour of appellant and indicate clearly the service tax amounts. Since Commercial & Training and Coaching Services approved for authorized operations, I find no justifiable reason to reject the refund.
8. As discussed above, I find that the rejection of refund claim on the above services is without basis. In respect of rejected amount to the extent of Rs. 1,953/-, the learned Advocate submits that the claim is not being contested since they are not in a position to submit relevant invoices.
9. In view of the above discussions, the impugned order is set aside and appeal is allowed except to the extent not contested by the appellant, with consequential relief to the appellant, if any.
(Dictated and pronounced in open court.) (V. Padmanabhan) Member (Technical) PK ??
??
??
??
2