Custom, Excise & Service Tax Tribunal
Gurgaon I vs Ms Bravura Solution India Pvt Llp on 3 May, 2024
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
REGIONAL BENCH - COURT NO. I
Service Tax Cross Objection Application No. 60280 of 2019
(on behalf of the Respondent-Assessee)
in Service Tax Appeal No. 60037 of 2019 [Arising out of Order-in-Appeal No. 120/ST/CGST-Appeal-Gurugram/SG/2018 dated 31.08.2018 passed by the Commissioner (Appeals) CE & ST, Gurugram] Commissioner of Central Excise & Service ......Appellant Tax, Gurgaon-I Plot No. 36-37, Sector 32, Gurugram, Haryana 122001 VERSUS M/s Bravura Solutions India Pvt LLP ......Respondent Building No. 14, 14th Floor, Tower B, DLF Cyber City Phase III, Sector 24 & 25A, Gurugram, Haryana 122002 APPEARANCE:
Present for the Appellant: Sh. Harish Kapoor, Authorized Representative Present for the Respondent: Sh. Pawan Pahwa, Sh. Praveen Kashyap & Sh. Pranav Jain, Advocates with Sh. Sarthak Mittal, C.A. CORAM:
HON'BLE Mr. S. S. GARG, MEMBER (JUDICIAL) HON'BLE Mr. P. ANJANI KUMAR, MEMBER (TECHNICAL) FINAL ORDER NO. 60218/2024 DATE OF HEARING: 03.05.2024 DATE OF DECISION: 03.05.2024 PER : S. S. GARG The present appeal filed by the Revenue is directed against the impugned order dated 31.08.2018 passed by the Commissioner (Appeals) Central Excise & Service Tax, Gurugram, whereby the 2 ST/Cross/60280/2019 in ST/60037/2019 learned Commissioner (Appeals) has remanded the matter to the adjudicating authority.
2. Briefly stated facts of the present case are that the respondent is registered under the Finance Act, 1994 and is engaged in the business of providing information technology software and business support services. The respondent's company is operating as an SEZ (Special Economic Zone) unit under the provisions of Special Economic Zones Act, 2005 and rules made thereunder. The SEZ unit is located in Gurugram, Haryana and has been declared as address of business premises in service tax registration certificate. The company has a registered office in New Delhi which is not involved in any conduct of business activity. The company had filed a refund claim for service tax paid on specified services used in relation to authorized operations in the SEZ unit in terms of Notification No. 12/2013-ST dated 01.03.2013. Details of the refund claims filed are as under:
Period Amount of Refund Date of filing
(Rs.) Refund
July to September 2016 1,85,400/- 28.07.2017
January to March 2017 32,84,966/- 28.07.2017
April to June 2017 48,59,749/- 01.08.2017
Total 83,30,115/-
The refund application filed by the respondent for a total refund of Rs.83,30,115/- was adjudicated by the refund sanctioning authority and vide order dated 16.03.2016, part of the refund to the extent of Rs.3,00,466/- was sanctioned and remaining refund amounting to Rs.80,29,649/- was rejected as per the following details:
3 ST/Cross/60280/2019
in ST/60037/2019
Period Refund Rejected Sanctioned
Claimed (Rs.) Amount (Rs.) Amount (Rs.)
July to September 1,85,400/- 0/- 1,85,400/-
2016
January to March 32,84,966/- 32,20,689/- 64,277/-
2017
April to June 2017 48,59,749/- 48,08,960/- 50,789/-
Total 83,30,115/- 80,29,649/- 3,00,466/-
Aggrieved by the rejection of refund claim, the respondent filed appeal before the learned Commissioner (Appeals) on the ground that the refund sanctioning authority has erred in holding that the input services have not been consumed in the SEZ unit, merely on account of raising of invoices by the service providers on the registered office of the company instead of its SEZ unit. After following the due process, the learned Commissioner (Appeals) appreciated the respondent's submissions and remanded the matter back to the adjudicating authority by the impugned order. The learned Commissioner (Appeals) further directed the Department not to reject the refund claim merely on the grounds of wrong address being mentioned on the invoices. Aggrieved by the said impugned order, the Department has preferred the present appeal and in response to the appeal filed by the Department, the respondent has filed the memorandum of cross objection.
3. Heard both the parties and perused the material on record.
4. The learned AR for the appellant-Department has submitted that the impugned order is not sustainable in law and as the same has been passed without properly appreciating the facts. He has 4 ST/Cross/60280/2019 in ST/60037/2019 further submitted that the input services were not consumed for authorized operations as the invoices were addressed to the respondent's registered office which is not in SEZ. 5.1 In response to the appellant-Department's contention, the learned Counsel for the respondent submits that all the input services were consumed for authorized operations only. He further submits that the respondent carries on its authorized operations from only one location i.e. SEZ unit and no operations are being undertaken at respondent's registered office. He further submits that the invoices for input services were inadvertently addressed to respondent's registered office while the input services were actually consumed at the SEZ unit. He further submits that the respondent's registered office is merely a liasoning office and has been established only for the purpose of correspondence with vendors etc and in compliance with provisions of the Companies Act. He also submits that no commercial activity is being undertaken from respondent's registered office and therefore, no GST registration is obtained for this office by the respondent.
5.2 The learned Counsel further submits that the respondent has furnished declarations from the service providers stating that the input services in question have been provided by them to the SEZ unit and that the same have been wholly consumed by the SEZ unit.
He further submits that the present issue is no more res integra as the same has been decided by various courts in a plethora of decisions across the country. He further submits that denial of 5 ST/Cross/60280/2019 in ST/60037/2019 Cenvat Credit pertaining to certain input service invoices which are addressed to unregistered premises of the respondent is not in accordance with the legal provisions and is contrary to a number of settled judicial precedents. In support of his submission, he relies on the following case-laws:
Cyquator Media Services Private Limited vs. Union of India & Others - 2018 (10) GSTL 297 (All).
M/s Bridal Jewellery Mfg. Co. vs. Commr of Cus, CE & ST, Noida - 2018 (10) GSTL 70 (Tri. - All).
A.K. Engineers vs. Commr of Cus, CE & ST, Bangalore-II - 2017 (349) ELT 180 (Tri. - Bang.).
5.3 The learned Counsel further submits that the substantial benefit cannot be denied merely on a procedural lapse. He also submits that it is a settled principle of law that distinction is to be made between a procedural condition of technical nature and a substantive condition and the benefit provided by the Government would not be denied to the assessee on non-compliance of procedural conditions. In this regard, he relies on the following decisions:
Mangalore Chemicals & Fertilizers Ltd vs. Deputy Commissioner - 1991 (55) E.L.T. 437 (S.C.) Sambhaji vs. Gangabal - 2009 (240) ELT 161 (SC) Deloitte Haskins & Sells vs. CCE, Thane-I - 2015 (38) STR 1220 (Tri. - Mumbai) Manipal Advertising Services Pvt Ltd vs. CCe, Mangalore
- 2010 (19) STR 506 (Tri. - Bang.) Anand Nishikawa Co. Ltd vs. CCE, Chandigarh - 2014 (34) STR 751 (Tri. - Del.)
6 ST/Cross/60280/2019 in ST/60037/2019
6. After considering the submissions made by both the parties and perusal of the material on record, we find that the refund claims of the respondent were rejected only on the ground that wrong address being mentioned in the invoices and the input services have not been consumed in the SEZ unit. We also find that the respondent has brought on record the fact that the registered office of the company does not carry out any operation and it is merely a liasoning office and has been established only for the purpose of correspondence with vendors etc and in compliance with provisions of the Companies Act and no commercial activity is being undertaken from this office and also, no GST registration is obtained for this office by the respondent. All the input services have been consumed in the SEZ unit located in Gurugram, Haryana, which is further cleared from the declarations issued by the service providers specifically stating that the input services in question have been provided by them to the SEZ unit and the same have been consumed in the SEZ unit only.
7. Further, we find that this issue is no more res integra as the same has been decided by various courts in a plethora of decisions consistently holding that the Cenvat Credit cannot be denied pertaining to certain input service invoices which are addressed to unregistered premises of the respondent. In this regard, we may refer the decision of the Hon'ble Allahabad High Court in the case of Cyquator Media Services Private Limited (supra) wherein Hon'ble High Court while deciding a similar issue has held that if all the information as stipulated in Rule 4A of Service Tax Rules is 7 ST/Cross/60280/2019 in ST/60037/2019 mentioned on the invoice, the Cenvat Credit cannot be denied. Relevant para of the said decision is reproduced herein below:
"34. In the present case, as we find that the adjudicating authority namely Commissioner himself has held that in regard to the issue no. (a) of Rs. 18.35 crores the Commissioner has dropped the demand for recovering of Cenvat credit on the similar set of facts where the Commissioner has held under Rule 4A of Service Tax Rules, 1994, the requirement is only to "the name and address of the person receiving the taxable service" and there is no requirement that the name and registered address of the person receiving the taxable service are appeared on the invoice for taking input service credit and this has been repeatedly laid down by the various CESTAT Tribunals"
Similarly, in the case of M/s Bridal Jewellery Mfg. Co. (supra) Allahabad Bench of the Tribunal has held as under:
"5. Having considered the rival contentions, I find that it is an admitted fact that the appellant has got only one manufacturing unit at "179, NSEZ, Noida" and another unit of appellant was working as Head office at "2705, Basement, Bank Street, Karol Bagh. New Delhi" It is further admitted fact that there is no separate business activity in their Head office other than the business of manufacture and export of jewellery. I further take notice of the practice that business concerns normally take loan facilities and/or banking facilities from a Bank Branch located near to the Head office for the sake of administrative convenience and business exigencies. Further, the Bank Officers have certified that the services provided to the appellant, the invoice of which addressed to the Head office are actually provided to the factory located at Noida. Under such admitted facts, I hold that the substantial benefit cannot be
8 ST/Cross/60280/2019 in ST/60037/2019 denied for mere technical or venial breach of the procedural law."
Also, in case of A.K. Engineers (supra) Bangalore Bench of the Tribunal allowed the refund to the assessee in respect of invoices where the address had been wrongly mentioned due to a clerical error and observed as follows:
"6. After considering the submissions of both the sides and on perusal of the records, I am of the opinion that the denial of Cenvat credit merely on wrong address mentioned by oversight is not justified when the same has also been clarified by the supplier by issuing the letter which is placed on record. It is a settled law that Cenvat credit should not be denied on mere technicalities. Keeping in view this fact, I am of the opinion that the impugned order to this extent is not sustainable in law and I allow the appeal with consequential relief, if any."
8. Further, we find that the receipt and the use of input services by the respondent have not been questioned by the Department and the issue relates only to validity of invoices which were issued to the wrong address, which is not registered with the Service Tax.
9. Further, we find that it is a settled law that substantial benefit cannot be denied merely on a procedural infraction. The decisions relied upon by the respondent cited supra, are squarely applicable in the present case.
10. In view of our discussion above, we do not find any infirmity in the impugned order and the same is upheld. Consequently, we allow 9 ST/Cross/60280/2019 in ST/60037/2019 the cross objection filed by the respondent. Further, we hold that the respondent is entitled to refund of service tax paid on input services used in relation to authorized operations in their SEZ unit situated in Gurugram, Haryana.
11. In the result, the appeal of the Revenue is dismissed in above terms.
(Operative part of the order pronounced in the open court) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) RA_Saifi