Custom, Excise & Service Tax Tribunal
M/S. Sai Life Sciences Ltd vs Cce, C & St, Hyderabad-Iv on 26 October, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Bench SMB
Court I
Appeal No. ST/25637,26597,27732,28424/2013
(Arising out of Order-in-Appeal No. 278/2012 (H-IV) S.Tax dt. 14.12.2012, No. 20/2013 (H-IV) S.Tax dt. 14.02.2013, No. 75/2013 (H-IV) S.Tax, dt. 17.06.2013, No. 143/2013 (H-IV) S.Tax dt. 24.09.2013 passed by C, CE & ST (Appeals-II), Hyderabad)
For approval and signature:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial)
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 Lordship wish to see the fair copy of the Order?
4.
Whether Order is to be circulated to the Departmental authorities?
M/s. Sai Life Sciences Ltd.,
..Appellant(s)
Vs.
CCE, C & ST, Hyderabad-IV.
..Respondent(s)
Appearance Shri. Prahlad, Advocate for the Appellant.
Shri. Nagraj Naik, Deputy Commissioner (AR) for the respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Date of hearing: 26/10/2016 Date of decision: 26/10/2016 FINAL ORDER No.______________________ [Order per: Sulekha Beevi, C.S.] The appellants are engaged in the business of providing contract research and development support to the drug and pharmaceutical industry and offers complete chemistry services in support of drug discovery and development. They registered with the Department under the taxable category of Scientific or Technical Consultancy Services. The appellant exported the service without payment of service tax, and availed various input services for providing the output services. They filed refund claim for the accumulated service tax paid for input services. The original authority and Commissioner (Appeals) rejected some part of refund claim. Hence these appeals. The details of the period involved, the amount of refund rejected by Commissioner (Appeals) and the input services involved are shown below as tabulated by the appellant.
Appeal No. ST/25637/2013 ST/26597/2013 ST/27732/2013 ST/28424/2013 Period Involved April, 2011 to September, 2011 October, 2011 to December, 2011 January, 2012 to March, 2012 April, 2012 to June 2012 Amount rejected by Ld. Commissioner (A) Rs. 14,44,364/-
Rs, 6,69,184/-
Rs. 38,82,840/-
Rs. 5,96,053/-
Services Involved
a) Clearing & forwarding agent service
b) MMR service
c) Management consultancy services
d) Manpower recruitment service
e) Renting of immovable property
f) Cleaning service
g) Courier service
h) Telecommunication service
i) Erection, commissioning and installation service
j) Fleet Rent a cab management service
k) Technical testing and analysis
l) ISD-Rs. 6,06,469/-
a) Technical inspection & certification
b) Clearing & forwarding agent
c) Management, maintenance or repair service
d) Courier services
e) ETP Operation & maintenance
f) Fleet Rent- a cab management service
g) Manpower recruitment
h) Business auxiliary service
i) AMC
j) CA services
k) ETP/STP operations
l) Management consultancy service
m) Technical testing & Analysis
n) Telecommunication service
a) Erection, Commissioning & installation
b) MMR service
c) Technical inspection and certification
d) Manpower recruitment and supply
e) Cleaning service
f) Management consultancy services
g) Telecommunication services h) AMC
i) ISD challans-Rs. 25,52,271/-
a) Business Auxiliary services
b) Courier services
c) Fleet Rent a cab management service
d) Technical testing & Analysis e) Management Consultancy f) Manpower supply g) Technical inspection & certification h) Telecommunication services
2. On behalf of the appellant, the Ld. Counsel Shri. G. Prahlad submitted that in these four appeals, the authorities below have rejected refund claim stating that the input services do not have nexus with output services. Further, that in appeal ST/25637/2013 and appeal ST/27732/2013, the appellants were not issued the Show Cause Notice proposing reasons for rejection. He contended that the appellant has been deprived opportunity to put forward proper defence and it amounts to violation of the principles of natural justice. The Ld. Counsel submitted that the second ground on which refund has been rejected is that some of the input service distributors invoice do not show the name of the service provider. He submitted that appellant had availed credit on services received by the Head Office, who issued of ISD challans. That therefore the rejection of refund on this ground is without basis. He relied upon judgment laid in Gulf Oil Corporation Limited Vs. CCE & ST, Vapi [2016 (43) S.T.R. 220 (Tri-Ahm)] and Commissioner of Service Tax, Ahmedabad Vs. Godfrey Philips India Limited [2009 (14) S.T.R. 375 (Tri-Ahmd)] to convass the argument that the authority having jurisdiction for the input services respondent is not contained the adjudicating upon ISD challans.
3. On behalf of the department, the Ld. AR Sh. Nagraj Naik reiterated the findings in the impugned order. He submitted that in appeals ST/25637/2013, ST/26597/2013 and ST/28424/2013, the appellants has availed credit on Rent-a-cab services which are not eligible for credit after 01.04.2011.
4. I have heard both sides. The list of services given in the above table except fleet management services/ Rent-a cab services have been held to be eligible for credit in various decisions passed by the Tribunal or High Courts. The various services and the case laws relied by the appellant/applicable are as under:
Sl. No Description of service Usage Case laws:
1.
Clearing & forwarding agent service Handling charges, loading and unloading charges are in relation to transportation inputs and other capital goods from customs authorities to Appellants premises Sundaram Clayton Ltd. Vs. Commissioner of C. Ex., Chennai-II-2016 (42) S.T.R.. 741 (Tri.- Chennai)
2. MMR service These services are used for regular wear and tear of machinery Xilinx India technology services Pvt Ltd Vs. CCE & ST, Hyd-IV-2016-TIOL-2087-CESTAT-HYD KPMG Vs. Commissioner of Central Excise, New Delhi-2014 (33) S.T.R. 96 (Tri. Del.)
3. Management consultancy services These services are used in relation to business processes and operations Xilinx India technology services Pvt. Ltd Vs. CCE & ST, Hyd-IV-2016-TIOL-2087-CESTAT-HYD
4. Manpower recruitment service Recruitment services are used towards recruitment of employees having vat experience in the field of research Xilinx India technology services Pvt. Ltd Vs. CCE & ST, Hyd-IV-2016-TIOL-2087-CESTAT-HYD
5. Cleaning service These services are used for maintaining day to day cleanliness and hygiene within the premises of the appellant HCL Technologies Ltd. Vs. Commissioner of Central Excise, Noida-2015 (40) S.T.R. 369 (Tri. Del.)
6. Courier service Services are utilized for sending documents to customers or the vendors which is an integral part of business. M/s. Reliance Industries Ltd Vs. Commissioner Of Central Excise & Service Tax, LTU,Mumbai-2016-TIOL-2392-CESTAT-MUM Xilinx India technology services Pvt. Ltd Vs. CCE & ST, Hyd-IV-2016-TIOL-2087-CESTAT-HYD
7. Telecommunication service These services are required for day to day correspondences with vendors, customers, which is quint essential for provision of the output services of the Appellant. Xilinx India technology services Pvt. Ltd Vs. CCE & ST, Hyd-IV-2016-TIOL-2087-CESTAT-HYD
8. Erection, commissioning and installation service Erection, commissioning or installation services are required for setting up various equipments and machinery for rendering output service Birla Corporation Ltd. Vs. Commissioner of C. Excise, Lucknow-2014 934) S.T.R. 589 (Tri. Del.) Kilburn Chemicals Ltd. Vs. Commissioner of C. Ex., Tirunelveli-2016 (41) S.T.R. 131 (Tri. Chennai)
9. Technical testing and analysis These services are utilized to ensure that the research activity carried out by the Appellant meets specified standards and delivers the required result. Semco Electri Pvt. Ltd. Vs. CCE, Pune -2013 (30) STR 572 (Tri-Mum)
10. Technical inspection & certification These services are utilized to ensure that the research activity carried out by the Appellant meets specified standards and delivers the required result. Semco Electric Pvt. Ltd. Vs. CCE, Pune-2013 (30) SR 572 (Tri-Mum)
11. ETP Operation & maintenance/ Effluent treatment charges The effluent generated in the process of delivering the output service is required to be treated and discharged as per the norms prescribed by the PCB and these services are essential to maintain the standards. Anar Chemicals Pvt. Ltd. Vs. Commissioner of C. EX., Ahmedabad-2011 (24) S.T.R. 32 (Tri. Ahmd.)
12. Business auxiliary service These services are used in relation to making survey of the international market and identifying customers. Conexant Systems Pvt. Ltd Vs. CCE & ST, Hyderabad-II-2016-TIOL-617-CESTAT-HYD
13. AMC The services are used to maintain the hardware, equipment and infrastructure facility of the company without which the company cannot perform its operations ADC India Communications Ltd Vs. Commr. of C. Ex., Bangalore-2014 (34) S.T.R. 637 (Tri. Bang.)
14. CA services These services are required for maintenance of the accounts as well as auditing of the records and for complying with statutory requirements. Conexant Systems Pvt. Ltd Vs. CCE & St, Hyderabad II- 2016-TIOL-617-CESTAT-HYD
15. Management consultancy service These services are taken by the company for obtaining advice, consultancy or assistance from experts on issues which affect business of the company. Xilinx India technology services Pvt. Ltd Vs. CCE & ST, Hyd-IV-2016-TIOL-2087-CESTAT-HYD
16. Pest control service These services are used for maintain day to day cleanliness and hygiene within the premises of the appellant ADC India Communications Ltd Vs. Commr. of C. Ex., Bangalore-2014 (34) S.T.R. 637 (Tri. Bang.)
17. Renting of immovable property To render services, the Appellant requires premises from where their resources operate. Commissioner of Central Excise, Bangalore Vs. Utopia India Pvt Ltd-2012 (26) S.T.R. 577 (Tri-Bang)
5. The appellant has claimed refund of credit of service tax paid on Rent-a cab services. The appellant has changed the nomenclature of the services from Rent-a-cab service to Fleet Management Services. Such change of name will not make the appellant eligible for credit because the services are used after 01.04.2011. The definition of input services expressly excludes Rent-a cab service and the appellant has not adduced evidence to prove that how they are eligible for credit on such service. Therefore the claim of credit in respect of Rent-a cab service is disallowed. In regard to other services, I hold that they qualify as input services and therefore are eligible for credit. The appellant having produced sufficient details with regard to the service provider and ISD challans and after verification as conceded by the Ld. AR, I hold that this issue is clarified and solved in favor of assessee.
6. From the foregoing, I hold that the appellants are eligible for credit in respect of services except Rent-a cab service/ Fleet management services.
7. In the result, the appeal is allowed partly with consequential reliefs, if any. (Operative part of this order pronounced in the Court on conclusion of hearing) SULEKHA BEEVI C.S. MEMBER (JUDICIAL) Lakshmi.
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