Custom, Excise & Service Tax Tribunal
Wm Logistics India Private Limited vs Indore on 27 August, 2018
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. IV
DATE OF HEARING/DECISION : 27/08/2018.
Service Tax Appeal No. 51802 of 2018 (SM)
[Arising out of the Order-in-Appeal No. IND-EXCUS-000-APP-
759-17-18 dated 26/03/2018 passed by The Commissioner
(Appeals - I), Customs, CGST & Central Tax, Indore (M.P.)]
M/s W.M. Logistics India Private Limited Appellant
Versus
CCE, C&ST, Indore Respondent
Appearance Shri S. Thirumalai, Advocate - for the appellant. Shri K. Poddar, Authorized Representative (DR) - for the Respondent.
CORAM: Hon'ble Shri C.L. Mahar, Member (Technical) Final Order No. 52902/2018 Dated : 27/08/2018 Per. C.L. Mahar :-
The present appeal challenges the Order-in-Appeal No. IND-EXCUS-000-APP-759-17-18 dated 26/03/2018.
2. The appellant is a 100% subsidiary of WM Logistics LLC, USA. As per the agreement with their parent company, they provided product development support services for collection and disposal activities of WML, USA. The appellant was registered for 2 ST/51802 of 2018 providing taxable services including „Information Technology Software Service‟. The dispute pertains to the claim for refund filed by the appellant for the period April, 2016 to September 2016, for refund of accumulated Cenvat credit in terms of Rule 5 of the Cenvat Credit Rules, 2004 read with the relevant Notification No. 27/2012 - CE (NT) dated 18/06/2012. The appellant claimed that they have exported their output service. The claim was supported by the necessary documents, as required under the relevant notification. The claim for refund was rejected by the original authority and the same was also upheld by the impugned order. The main reason for rejection of such refund claim is that the appellant failed to submit documentary evidence for export of services in the form of „Softex Forms‟. The lower authorities have recorded that the submission of Softex Forms duly certified by the Software Technology Park (India) (STPI) Authorities is a requirement in the case of off shore export of services through data communication link, as per the RBI guidelines. Aggrieved by the rejection of their refund claims under Rule 5 of Cenvat Credit Rules, 2004, the present appeal has been filed.
3. With the above background, heard Shri S. Thirumalai, learned Advocate. Revenue was represented by Shri K. Poddar.
4. The arguments advanced on behalf of the appellant is summarised below:
3 ST/51802 of 2018 (1) The learned Advocate submitted that the only reason given by the authorities below for rejection of the refund claim is the appellant‟s inability to submit the Softex Forms. He emphasized the fact that all other supporting documents in the form of invoices issued to WML, foreign inward remittance certificate issued by the banks as well as the Chartered Accountant‟s certificate certifying the export turnover have been duly submitted and the authorities below have not recorded anything against these documents.
(2) He submitted that the requirement of submission of Softex Forms is not applicable for the export of software undertaken by the appellant as has been held by the Tribunal in the case of Mobile Iron India Software Pvt. Ltd. Vs. CCE, Hyderabad - 2017 (3) CGST 518 (Tri.- Hyd.).
(3) He submitted that the appellant is satisfying all the conditions prescribed in the Notification No. 27/2012 as well as Rule 6A of the Service Tax Rules, 1994 and is entitled to such refund and the same may be ordered to be paid.
5. The learned DR justified the impugned order and pointed out that the departmental authorities need to be satisfied with the fact that the services have been exported and the foreign exchange received is towards such exports. Only subject to such satisfaction, the refund under Rule 5 of the Cenvat Credit Rules, 2004 can be sanctioned. He argued that the original authority has recorded that the appellant has failed to submit documentary evidence for export. For non-fulfillment of Condition (g) of the 4 ST/51802 of 2018 relevant notification, the refunds have been rightly rejected. The requirement of submission of Softex Forms has been confirmed by the Additional Director STP vide his letter dated 28/12/2016 and hence the lower authorities have rightly rejected the refund claims.
6. Heard both sides at length and perused the record.
7. The refund under Rule 5 of the Cenvat Credit Rules, 2004 may be granted by the departmental authorities subject to fulfillment of the conditions and safeguards prescribed in the Notification No. 27/2012-CE (NT). The conditions and safeguards have been prescribed to ensure that the services have been duly exported and payment for the same has been received in foreign exchange. Documentary evidences as prescribed under notification are required to be submitted to satisfy the requirements.
8. In respect of the refund claims filed by the appellant for the quarter April 2016 to September 2016, the only objection recorded by the lower authorities is that the documentary evidence for export of services has not been satisfactorily submitted. The STPI authorities have vide their letter dated 28/12/2016 that the Softex Form is required to be submitted as per the RBI guidelines to evidence the export of goods/services through data communication links. The appellant is not registered with STPI authorities and hence could not submit such forms but through this appeal have claimed that the Softex Form is not a 5 ST/51802 of 2018 requirement for export of services through internet. It has been submitted that the Softex Forms are requirement only in the case of software export in media form. To this effect they have relied on the decision of the Tribunal in the case of Mobile Iron India Software Pvt. Ltd. (supra).
9. I have carefully considered the decision of the Tribunal in the case cited by the appellant. In the said case also one of the grounds for rejection of refund was non-production of Softex returns from STPI authorities. The Tribunal has analyzed the issue and has observed as follows:
"8. The second ground for rejection of the refund is that the appellant has not produced SOFTEX returns from STPI authorities. Again, the said document as per Foreign Exchange Management (Export of Goods & Services) Regulations, 2015, shows that it relates with export of goods and software and not with regard to export of services. The relevant Rule of Foreign Exchange Management (Export of Goods & Services) Regulations, 2015 is reproduced below :
"For the removal of doubt, it is clarified that, in respect of export of services to which none of the forms specified in these Regulations apply, the exporter may export such services without furnishing any declaration, but shall be liable to realise the amount of foreign exchange which becomes due or accrues on account of such export, and to repatriate the same to India in accordance with the provisions of the Act, and these Regulations, as also other rules and regulations made under the Act."
6 ST/51802 of 2018 "Declaration in Form SOFTEX
(i) The declaration in Form SOFTEX in respect of export of computer software and audio/video/television software shall be submitted in triplicate to the designated official of Ministry of Information Technology, Government of India at the Software Technology Parks of India (STPIs) or at the Free Trade Zones (FTZs) or Special Economic Zones (SEZs) in India.
(ii) After certifying all three copies of the SOFTEX form, the said designated official shall forward the original directly to the nearest office of the Reserve Bank and return the duplicate to the exporter. The triplicate shall be retained by the designated official for record."
9. The above regulations shows that the insistence to furnish SOFTEX returns from STPI authorities is not as per law laid in the relevant field."
10. The Tribunal has concluded as above that the insistence to furnish Softex returns from STP authorities is not as per the law laid down in the relevant field. In the present case also, the appellant has claimed to have exported Information Technology Software Service. The fact of export of such software and the receipt of the foreign exchange therefore is sufficiently evidenced from the invoices, the FIRCs and the Chartered Accountant‟s certificate certifying the total turnover.
7 ST/51802 of 2018
11. In view of the above, I am of the view that the appellant is entitled to refund in terms of Rule 5 of Cenvat Credit Rules. The impugned order is set aside and appeal allowed.
(Order dictated and pronounced in open court.) (C.L. Mahar) Member (Technical) PK