Custom, Excise & Service Tax Tribunal
M/S Caliber Point Business Solutions ... vs Commissioner Of Service Tax, Mumbai on 10 February, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. ST/152 & 153/09 (Arising out of Order-in-Appeal No. AH/155 & 156/BEL/2009 dated 31.3.2009 passed by the Commissioner of Central Excise (Appeals), Mumbai-II). For approval and signature: Honble Shri Ashok Jindal, Member (Judicial) ======================================================
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 should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== M/s Caliber Point Business Solutions Ltd. Appellant Vs. Commissioner of Service Tax, Mumbai Respondent Appearance: Shri Abhishek Rastogi C.A. for Appellant Shri B.P. Pareira JDR for Respondent CORAM: SHRI ASHOK JINDAL, MEMBER (JUDICIAL) Date of Hearing: 10.02.2010 Date of Decision: 10.02.2010 ORDER NO. WZB/MUM/2010 Per: Shri Ashok Jindal, Member (Judicial)
These appeals are filed against the impugned order, wherein refund claim with regard to the excess CENVAT credit lying in their Cenvat account was rejected by both the lower authorities.
2. The brief facts of the case are that the appellants filed an application for refund of CENVAT credit under Rule 5 of the Cenvat Credit Rules, 2004 amounting to Rs.4,66,090/-. The appellants were issued a show-cause notice on the following grounds: -
(i) Some of the invoices issued by M/s TQ3 Travel Solutions India Pvt. Ltd. do not have service tax registration on it.
(ii) The registration number mentioned on the invoices issued by M/s Routes Car Rentals (I) Pvt. Ltd. do not match with the registration number given in the details submitted along with the claim.
(iii) As per invoices of M/s Routes Car Rentals (I) Pvt. Ltd., M/s Indiatravel Pvt. Ltd., M/s Parvatham Cabs, the cab services have been used outside Mumbai and the use of these services as input services for providing of output services apparently cannot be established.
(iv) Invoices issued by M/s Modem Maintenance Service, M/s Saraf Hospitality Services, M/s Prashant Freight Forwarders Pvt. Ltd., M/s Parvatham Cabs, M/s KPMG, M/s Aumkar do not have service tax registration numbers on them.
(v) Some of the invoices are of travel agents against air tickets of executives, the use of which in the output services apparently cannot be established.
(vi) The assessees have not submitted original copies of any of the invoices for verification.
In the adjudication proceedings, the adjudicating authority held that the appellants were having the aforesaid amount to adjust against the refund claim. Hence, the refund claim under Rule 5 of the Cenvat Credit Rules, 2004 is not maintainable and he rejected their refund claim. The same was confirmed by the appellate authority. Aggrieved from the same, the appellants are before me.
3. The learned C.A. appearing for the appellants submits that as per the show-cause notice, the demand was proposed on the following grounds: -
(a) Registration number was not mentioned in the invoices.
(b) Original documents were not submitted.
(c) Denial of CENVAT credit on inputs service, such as Rent-a-Cab and Air Travel Services.
(d) Non-utilization of the CENVAT credit, and
(e) Difference in ST-3 and refund claim.
He further submits that after adjudication, the demand against the registration number and original documents were dropped and the inputs service credit on the Rent-a-Cab and Air Travel Service were disallowed and the non-utilization of CENVAT credit and difference in ST-3 and refund claim was not the subject matter of the show-cause notice. He further submits that without alleging in the show-cause notice, the adjudicating authority has no power to decide the issue. To support his contention, he placed reliance on Bhagwati Silk Mills Vs. Commissioner of Central Excise, Surat reported in 2006 (205) ELT 182 (Tri-Mum), wherein it was held that goods cannot be confiscation there being a notice to that effect and adjudicating authority cannot travel beyond the show-cause notice. Further, in the case of Reckitt & Colman of India Ltd. Vs. CCE 1996 (88) ELT 641 (SC), it was held that it is beyond the competence of the Tribunal to make out in favour of the Revenues case which the Revenue had never canvassed and which the appellants had never been required to meet. Hence, the demand on account of non-utilization of CENVAT credit and difference in ST-3 and refund claim is not sustainable.
3.1 With regard to the eligibility of inputs service credit on Rent-a-Cab and Air Travel Service, he placed reliance on CST, Delhi Vs. Convergys India Pvt. Ltd. 2009-TIOL-888-CESTAT-DEL, wherein this Tribunal has held that without questioning the credit taken, the eligibility to rebate cannot be questioned. The eligibility to the credit of the duty paid on inputs and the credit of tax paid on input services are not contingent on whether the services are exported or not. There cannot be two different yardsticks, one for permitting credit and the other for eligibility for granting rebate. He further submitted that in the case of CCE, Mumbai-V Vs. GTC Industries Ltd. 2008-TIOL-1634-CESTAT-MUM-LB, Larger Bench of the Tribunal has held that if the cost of such goods and services borne by the factory, the same will form part of expenditure incurred by the manufacturer and will have a bearing on the cost of production. And, in this case, the lower authority has not given any contrary finding to this effect. Hence, the appeal be allowed.
4. On the other hand, the learned SDR reiterated the impugned order and submitted that the refund claim is not filed under Rule 5 of the Cenvat Credit Rules, 2004, hence, the impugned order is sustainable.
5. Heard both sides.
6. On careful examination of the issue involved in this case, I find that the adjudicating authority has gone beyond the scope of show-cause notice, while denying the refund claim on the ground of non-utilization of CENVAT credit and difference in ST-3. The adjudicating authority cannot go beyond the allegation made in the show-cause notice, hence the denial of CENVAT credit not utilized and the difference in ST-3 are not sustainable and the refund is allowed.
7. Furthermore, the lower authorities have never gave the clear finding that why the appellants are not entitled to take the CENVAT credit on the inputs service Rent-a-Cab and Air Travel Service while adjudicating the case without any speaking order. The finding that the use of Rent-a-cab service is in traveling of persons and has nothing to do with the service of Business Auxiliary Service is not sufficient. I am convinced by the arguments of the learned C.A. that as the appellants are providing B.P.O. service and in relation to their business, they have to avail Rent-a-cab service and Air Travel Service, which are used by them in relation to their business activity. Accordingly, the appellants are entitled to take the CENVAT credit on these services. I do not fine any merits in the impugned order and the same is set aside. The appeals filed by the appellants are allowed with consequential relief.
(Dictated and pronounced in Court) (Ashok Jindal) Member (Judicial) Vks/ 1