Custom, Excise & Service Tax Tribunal
The Commissioner Of Service Tax vs ) M/S. Fidelity Business Services India ... on 3 July, 2012
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench - Division Bench
Court - I
Date of Hearing: 03.07.2012
Date of decision: 03.07.2012
Miscellaneous Application Nos. 304 & 305/2011
Stay Application Nos.1514, 1541, 1691 to 1693, 1697 to 1699, 1515/2010, 1506 & 1507/2011
Service Tax Appeal Nos. 2516, 2550, 2754 to 2756, 2760 to 2762/2010, 2517/2010, 2454 & 2455/2011
(Arising out of Orders-in-Appeal No. 100/2010 dtd 04.03.2010, 332 to 334/2010 dtd. 26.08.2010, 559/2010 dtd. 20.10.2010, 514/2010 dtd. 28.09.2010, 557/2010 dtd. 20.10.2010, 553 & 554/2010 dtd. 19.10.2010, 556/2010 dtd. 19.10.2010, 195/2010 dtd. 26.04.2010, 258 & 259/2011 dtd. 31.03.2011 and 266 & 267/2011 dtd. 31.03.2011 passed by the Commissioner of Central Excise, Bangalore)
For approval and signature:
Honble Mr. P.G. Chacko, Member (Judicial)
Honble Mr. M. Veeraiyan, Member (Technical)
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3. Whether their Lordship wish to see the fair copy of the Order?
Seen
4. Whether Order is to be circulated to the Departmental authorities?
Yes
The Commissioner of Service Tax
Bangalore ..Appellant(s)
Vs.
1) M/s. Fidelity Business Services India Pvt. Ltd.
2) M/s. Airbus Engineering Centre India Pvt. Ltd.
3) M/s. Global eBusiness Operations Pvt. Ltd.
4) M/s. Infinera India Pvt. Ltd.
5) M/s. Facetime Communications India Pvt. Ltd.
6) M/s. Fidelity Business Services India Pvt. Ltd.
7) do-
8) M/s. IDS Software Solutions India Pvt. Ltd.
9) M/s. Mach Teledata Systems Pvt. Ltd.
10) M/s. RSA Security India Pvt. Ltd.
11) M/s. Toshiba Embedded Software (India) Pvt. Ltd.
Respondent(s)
Appearance Ms Priya Jagdish, Mr. T. Suryanarayan, Harish, Ms. Bindu Madhavan, Mr. Sadashivu & R Prasad, advocates for the appellants Mr. Ravi Chandran & N. Jagdish, Superintendents (AR), for the Revenue Coram:
Honble Mr. P.G. Chacko, Member (Judicial) Honble Mr. M. Veeraiyan, Member (Technical) FINAL ORDER No._______________________2011 [Order per: P.G. Chacko]. All the stay applications seek stay of operation of the impugned orders. The two miscellaneous applications pray for condonation of the delay of the respective appeals, which is of 29 days in respect of Appeal No. ST/2454/2011 and of 28 days in respect of Appeal No. ST/2455/2011. These COD applications are allowed at the outset as these are not opposed and the delay of the appeals has been satisfactorily explained.
2. There is no representation for the respondents in Appeals ST/2517, 2755, 2756/2010 and Nos. ST/2454 and 2455/2011 despite notice, nor is there any request of theirs for adjournment. All other parties are represented. After hearing both sides, we have valid reasons to take up all the appeals for final disposal. Accordingly, after dismissing the stay applications, we take up the appeals.
3. We have perused the records and have found that the respondents in these appeals had claimed refund of accumulated CENVAT credit taken on numerous services which were claimed to be input services and to have been used for export of output services. In a few cases, the original authority granted partial relief having found nexus between the exported output services and some of the input services. A part of the refund claim was rejected in the absence of such nexus. In one case (vide ST/2755/2010), the entire claim was rejected by the original authority on the sole ground that the claimant had not been registered with the department during the relevant period. In all other cases, the entire claim was rejected by the original authority mainly on the ground that no nexus as above had been established by the claimants. Aggrieved by the adverse part of the orders-in-original, the parties preferred appeals to the Commissioner (Appeals) and the orders passed by the appellate authority are presently under challenge before us.
4. The only ground raised by the department in these appeals is that the impugned orders were passed by the learned Commissioner (Appeals) without jurisdiction inasmuch as, according to the appellant, the Commissioner (Appeals) did not have the power of remand. The learned Superintendent (AR) has reiterated this ground of the appeals and has also relied on the Honble Supreme Courts judgment in the case of MIL India Ltd. Vs. CCE, Noida [2007 (210) E.L.T. 188 (S.C)]. It is submitted by the learned counsel/consultants representing some of the respondents that the orders of the Commissioner (Appeals) are liable to be sustained. In some of these cases, the submission is that the learned Commissioner (Appeals) decided the substantive issue on merits and only remitted the matters to the original authority for the limited purpose of requantification of amounts of refund. In these cases, it is submitted, the learned Commissioner (Appeals) cannot be held to have passed any remand order and therefore the appeals of the department are liable to be rejected.
5. We have given careful consideration to the submissions. On a perusal of the records of these appeals, we note that the orders passed by the learned Commissioner (Appeals) in the case of M/s. Fidelity Business Services India Pvt. Ltd., M/s. Airbus Engineering Centre India Pvt. Ltd., M/s. Facetime Communications India Pvt. Ltd., M/s. IDS Software Solutions India Pvt. Ltd., M/s. RSA Security India Pvt. Ltd. and M/s. Toshiba Embedded Software (India) Pvt. Ltd. cannot be called remand orders inasmuch as, in these cases, the appellate Commissioners decided the nexus issue and only directed the lower authorities to requantify the amounts for refund after calling for Chartered Accountants certificate in terms of the Boards Circular No. 120/1/2010 dated 19.01.2010 and examining the same. The appeals of the department in these cases are also solely based on the Honble Supreme Courts decision in the case of MIL India Ltd. In other words, we are not called upon to decide on the substantive issue. If that be so, the orders passed by the learned Commissioner (Appeals) are sustainable and, pursuant to those orders, the original authorities will have to requantify the amounts for refund in terms of the Boards Circular dated 19.01.2010 ibid.
6. In this view of the matter, we dismiss the appeals ST/2516, 2550, 2756 and 2762/2010 and the appeals ST/2454 and 2455/2011.
7. The orders passed by the learned Commissioner (Appeals) in the case of M/s. Mach Tele Date Systems Pvt. Ltd., M/s. Global eBusiness Operations Pvt. Ltd. (respondents in Appeal Nos. 2517 & 2754/2010) and M/s. Fidelity Business Services India Pvt. Ltd. (respondent in Appeal Nos. ST/2760 & 2761/2010) stand on a different footing inasmuch as these orders are clearly in the nature of remand orders. In these cases, the learned Commissioner (Appeals) did not take any view on the nexus issue and required the lower authorities to decide on this issue by following the guidelines prescribed in the Boards Circular dated 19.01.2010 ibid. As rightly submitted by the learned Superintendent (AR), these orders directing the original authorities to decide afresh on the substantive issue and requantify refund (if any) by following the Boards guidelines were passed without jurisdiction. In the case of MIL India Ltd. (supra), the Honble Supreme Court held that a Commissioner of Central Excise (Appeals) did not have the power of remand from 11.05.2001, the date with effect from which Section 35A of the Central Excise Act was amended. The apex courts ruling was followed by this Tribunal in the case of CCE, Noida Vs. Orient Crafts Ltd. [2011 (21) S.T.R. 302 (Tri.-Del.)] wherein it was held that a Commissioner of Service Tax (Appeals) also did not have the power of remand under Section 85(5) of the Finance Act 1994. In view of the cited case law, we are constrained to set aside the relevant orders of the Commissioner (Appeals). At the same time, we agree with the reasons recorded by him for requiring the lower authorities to undertake de novo adjudication. Obviously, the Boards guidelines were not available to the original authorities when they passed the orders-in-original. Therefore, the learned Commissioner (Appeals) took the view that the original authorities should decide the nexus issue afresh and then proceed, if necessary, to quantify the amounts for refund by following the Boards guidelines. In this view of the matter, we direct the original authorities to decide afresh on the question whether there is nexus between the exported services and the relevant input services and, in the event of finding such nexus, quantify the amounts for refund by following the Boards guidelines. Needless to say that the parties should be given a reasonable opportunity of adducing evidence (Chartered Accountants certificate) and of being personally heard. In the result, we set aside the relevant orders of the Commissioner (Appeals) and allow this group of appeals of the department by way of remand.
8. Appeal No. ST/2755/2010 is unique in the sense that this appeal of the Revenue is directed against the appellate Commissioners order granting full refund to the respondent on a different ground. The relevant show-cause notice had proposed to deny refund to the party on different grounds stated velow:
(a) There was no nexus between the exported services and the input services;
(b) The claimant was not registered with the department during the material period.
When this show-cause notice came up for adjudication, the original authority gave a go-by to the nexus issue and rejected the refund claim on the sole ground of non-registration. Aggrieved, the party approached the Commissioner (Appeals) and the latter set aside the order-in-original and virtually allowed refund without adverting to the nexus issue. Here again, strangely, the ground raised by the department in Appeal No. ST/2755/2010 is the stated absence of remand power. On our part, we have found a fit case here for remand to the original authority for an entirely different reason. Though, in the show-cause notice, the department had disputed the partys claim of nexus, the original authority did not advert to the issue. The appellate authority also did not deal with the issue. Both the authorities chose to proceed on the premise that there was nexus between the exported services and the input services and that the party was not entitled to refund for want of registration with the department. As the crucial issue was sidestepped, the matter has to be sent back to the original authority. We therefore set aside the relevant impugned order and allow this appeal by way of remand with a direction to the original authority to undertake de novo adjudication of the show-cause notice and pass a speaking order on all issues after giving the party a reasonable opportunity of adducing evidence and being personally heard. It goes without saying that, in the event of any part of the refund claim being held to be admissible to the party on merits, the amount for refund shall be quantified by following the Boards guidelines contained in Circular No. 120/1/2010 dated 19.01.2010.
9. All the appeals stand disposed of along with the connected applications.
(Pronounced and dictated in open Court)
(M. VEERAIYAN) (P.G. CHACKO)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
iss