Custom, Excise & Service Tax Tribunal
Sun Microsystems (I) Pvt Ltd vs Commissioner Of Central ... on 27 March, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/523/2011-SM [Arising out of Order-in-Appeal No. 55-2010 dated 30/11/2010 passed by Commissioner(Appeals), LTU, Bangalore] For approval and signature: HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER 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? SUN MICROSYSTEMS (I) PVT LTD 6TH FLOOR, DIVYASHREE CHAMERS, OFF.LANGFORD ROAD, BANGLAORE 560025. Appellant(s) Versus Commissioner of Central Excise,Customs and Service Tax BANGALORE-LTU NULL 100 FT RING ROAD JSS TOWERS, BANASHANKARI-III STAGE, BANGALORE, - 560085 KARNATAKA Respondent(s)
Appearance:
Ms. Sudershana Banu, Advocate For the Appellant Shri A.K. Nigam, Addl. Commissioner(AR) For the Respondent Date of Hearing: 27/03/2015 Date of Decision: 27/03/2015 CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER Final Order No. 20900 / 2015 Per : B.S.V. MURTHY The appellant filed refund claim for CENVAT credit taken on input services under Notification No.5/2006-CE(NT) read with Rule 5 of CENVAT Credit Rules on the ground that the accumulated credit could not be utilised by them. The period involved is October 2008 to February 2009. The refund claim, after due proceedings, has been rejected mainly on two grounds. a. There is no export of service as per the provisions of Export of Service Rules.
b. The appellant could have utilised the CENVAT credit for payment of tax.
2. As regards the first ground, the learned counsel submits that appellant is engaged in providing marketing, administrative and other services to M/s. Sun Microsystems Pvt. Ltd., Singapore. Basically they provided warranty on behalf of Sun Microsystems Pvt. Ltd. and also provided warranty for sale of some of the products of Sun Singapore. She relies on the decision in the case of GAP International Sourcing (I) Pvt. Ltd. Vs. CST [2014-TIOL-465-CESTAT-DEL] to submit that in such cases, the service is considered to have been exported. Para 9 of the decision was cited and is reproduced below:-
9. In this case, M/s. GAP, U.S.A., do not have any branch or project or business establishment in India. The service in relation to procurement of goods being provided by the appellant are entirely meant for M/s. GAP, U.S.A. and the service in question, - business auxiliary service, covered by Rule 3(1)(iii) of the Export of Service Rules, 2005 have obviously been used by M/s. GAP, U.S.A. in relation to their business located abroad. Therefore these services have to be treated as delivered outside India and used outside India and since payment for the service has been received in convertible foreign exchange, the same would have to be treated as exported out of India. The impugned order passed by the commission is an absurd order contrary to the provisions of Export of Service Rules, 2005.
In this case also, as a result of providing of marketing and warranty support, the benefit of intermediate sales and benefit of sales goes to Sun Microsystems, Singapore and therefore it cannot be said that the service has not been exported at all. In the decision, the Tribunal has elaborately discussed the provisions of Export of Services Rules and has taken note of the fact that apex court has observed that service tax is a destination based tax. In that case also, the service provided was classified as business auxiliary service. In my opinion, in the appellants case also, a similar stand can be taken. Accordingly this ground for rejection of refund claim cannot be sustained. Further I also have to observe that while the Commissioner has considered the provisions of Export of Services Rules and has held that the service has to be considered as performed in India, he has failed to take note of the fact that there is a specific provision in the Export of Services Rules providing that where a service is partly performed outside India and partly performed in India, it is considered as performed abroad. In this case, when marketing service is provided or warranty service is provided from India, the original request had gone to Sun Microsystems Singapore and or the appellant would have received the request as an agent to Sun Microsystems, Singapore and therefore it has to be held as partly performed in India and partly performed outside India. Therefore it has to be observed that appellant has rendered export of service.
4. The second ground taken for rejection is that appellant could have utilised the accumulated CENVAT credit. The learned counsel submitted that no doubt appellant had paid service tax in cash as observed by lower authorities but she submits that the relevant ST-3 returns would show that the entire amount of service tax was paid by them as a recipient of service which in accordance with law is required to be paid in cash only. Further she also submits that this was not the ground taken in the show-cause notice. In any case, in my opinion, if the requirement of law is that service tax has to be paid in cash, naturally the CENVAT credit available cannot be used. Rejection of the claim on this ground cannot be sustained.
5. In the result the appeal is allowed with consequential relief, if any, to the appellant.
(Order pronounced and dictated in open court) B.S.V.MURTHY TECHNICAL MEMBER Raja.
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