Custom, Excise & Service Tax Tribunal
M/S. Alliance Global Services It India ... vs Cc,Ce&St, Hyderabad-Ii on 21 January, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No.ST/1434/2012 (Arising out of Order-in-Appeal No.71/2012(H-IV) S.Tax dt. 27/03/2012 passed by CC,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. Alliance Global Services IT India Pvt. Ltd. ..Appellant(s) Vs. CC,CE&ST, Hyderabad-II ..Respondent(s)
Appearance Shri Abhisek Rastogai and Shri Rahul Binani, Authorised representatives for the appellant.
Shri H.S. Narkar, Authorised representative for the respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Date of Hearing:21/01/2016 Date of decision:21/01/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The appellants are registered as 100% EOU and are holding service tax registration for providing taxable services under the category of Information Technology Software Services. They filed two refund claims for the period October 2010 and November 2010 being the unutilised CENVAT credit of service tax paid on input services under Rule 5 of the CENVAT Credit Rules 2004 read with Notification No.5/2006-CE(NT) dt. 14/03/2006. A show-cause notice was issued proposing to deny the refund. After due process of law, the adjudicating authority denied both refund claims. The appellant carried the issue in appeal and vide the order impugned herein, the Commissioner(Appeals) upheld the rejection of refund claims. Being aggrieved, the appellants have preferred this appeal.
2. On behalf of the appellant, the learned consultant Shri Abhisek Rastogi submitted that the appellant who is a 100% EOU had applied for refund of unutilised credit accumulated in their CENVAT account. The authorities below have denied refund holding that the input services on which credit was availed have no direct nexus with the output services provided. By denying the credit on all the input services availed by the appellant it would seem to appear that the appellant has not availed any input services at all. The category of services and the amount pertaining to these services as tabulated by the learned consultant is as under:-
S.No. Category of services Amount (Rs.)
1.
Security Agency services 20,776
2. Management or Business Consultants Services 5,694
3. Technical Inspection and Certification Services 6,798
4. Management, Maintenance or Repair Services 86,251
5. Telecommunication Services / Internet Telecommunication Services 73,484
6. Renting of Immovable Property Services 4,97,498
7. Business Support Services 1,120
8. Manpower Recruitment or Supply Agencys Services 40,695
9. Courier Services 628
10. Chartered Accountant Services 9,785
11. Commercial Training or Coaching Services 7,388
12. Information Technology Software Services 24,877 Grand Total 7,74,994
3. He submitted that the period involved is prior to 01/04/2011 when the definition of input services had wide ambit as it included the words activities relating to business. The Commissioner(Appeals) has erred in holding that the input services do not have any nexus with output services since all the services were availed by the appellant for providing the output services. Further that the Commissioner(Appeals) has interchangeably used the words input and input services while examining the issue as is seen from the impugned order. The cases relied by the Commissioner are the decisions rendered in Maruti Suzuki Ltd. Vs. CCE, Delhi-III [2009(240) ELT 641 (SC)], Vandana Global Ltd. Vs. CCE, Raipur [2010(253) ELT 440 (Tri. LB)] which are analysing the eligibility of credit on input and not of input services. The grounds on which the credit was denied are that the input services are not related to output services and that the amounts shown in foreign inward remittance certificates do not have one-to-one correlation with the export invoices. The learned consultant pointed out that in the impugned order, the Commissioner has held that credit cannot be denied on the ground that there is no one-to-one co-relation between the export of services and inward remittances. Though it was also held that in principle, the appellants are eligible for refund sought by them the Commissioner(Appeals) disposed the appeal directing the adjudicating authority to verify the running account maintained by the appellants with regard to FICR and export invoices. He argued that the input services like manpower recruitment or supply agency services, renting of immovable property services, security agency services, telecommunication services etc. have held to be eligible for credit by various judgments passed by the CESTAT as well as High Courts. He pleaded that the appeal may be allowed.
4. Refuting the above contentions, the learned AR Shri H.S. Naskar put forward the contention that appellant has not established correlation between the remittances received in FICR and the invoices raised for export of services. That therefore the matter has to be remanded to the adjudicating authority for verification of these remittances.
5. I have heard the rival submissions made by both the sides. The main contention put forward on behalf of the Revenue was that the appellant has not been able to establish one-to-one correlation between the remittances received in foreign exchange and the invoices raised for export of services. The Commissioner himself has held that such one-to-one correlation is not necessary. It is contended by the appellants that the remittances were received in lumpsum and in a continuous account. The invoices raised for export of the services are being adjusted against the said inward remittances in the running account. In the present case, there is no dispute with regard to the export of service or the inward remittances received. So also appellants have submitted all the necessary documents for scrutiny of the refund. When all records were available with the Department, I do not think it is fair on the part of the Revenue after having two opportunities to verify the facts regarding the export of services and inward remittances, to direct the original authority to verify and also at the Tribunal stage to request for remand. Again it has to be mentioned the period involved is prior to 01/04/2011 when the definition of inputs had a wider ambit as it included almost all services within its purview as the definition included activities relating to business. In Coca Cola India Pvt. Ltd. Vs. CCE, Pune-III [2010(15) STR 657 (Bom.)], KPMG case etc., the Honble High Courts as well as Tribunal have held that all the services listed in the above table are eligible for credit. It is not brought out by Revenue as to what is the further evidence that is necessary to decide the refund claim. There is no dispute or discrepancy regarding the export of services, and the FICR received. The Department has not issued any letter requesting the appellant to produce further document. The Commissioner has held that on principle, the appellants are eligible for refund. The refund has been sought to be denied and delayed in the guise of verification. In view thereof following the ratio laid in the judgments cited supra, I have no hesitation to conclude that the impugned services qualify as input services. The refund of credit is, therefore, admissible. In the result, the impugned order is set aside and appeal is allowed with consequential relief, if any.
(Operative part of this order was pronounced in court on conclusion of the hearing) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Raja.
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