Custom, Excise & Service Tax Tribunal
Commissioner Of Service Tax Service ... vs M/S. Maxim India Integrated Circuit ... on 15 February, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/20343/2016-SM, ST/20344/2016-SM [Arising out of Order-in-Appeal No. 518 to 522/2015 dated 27/11/2015 passed by Principal Commissioner Of Service Tax, BANGALORE-II( Appeal) ] COMMISSIONER OF SERVICE TAX Service Tax-II Commissionerate 4TH FLOOR, T.T.M.C. -B.M.T.C. BUS STAND BUILDING, OLD AIRPORT ROAD BENGALURU - 560071 Appellant(s) Versus M/s. Maxim India Integrated Circuit Designs (P) Ltd No. 132/133, West Wing, II Floor, Divyashree Technopolis, Yamuna Post, Off Old Airport Road, BANGALORE - 560037 KARNATAKA Respondent(s)
Appearance:
Shri Parasiva Murthy, AR For the appellant None For the respondent Date of Hearing: 15/02/2017 Date of Decision: 15/02/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20257-20258 / 2017 Per : S.S GARG The Revenue has filed these two appeals against the impugned order dated 27.11.2015 whereby the Commissioner (A) has disposed of five appeals. Out of these five appeals, these two appeals have been filed by the Revenue. Since the issue involved in both the appeals is common, therefore both the appeals are being disposed of by this common order.
2. Briefly the facts of the case are that the assessee is registered with the service tax department for providing taxable services under the category of Information Technology Software Services (ITSS). The assessee filed these five refund claims as shown in the table below under the Notification No.5/2006-CE dated 14.3.2006 read with Rule 5 of CENVAT Credit Rules (CCR), 2004 claiming the refund of CENVAT credit availed on the service tax on the input services which are used by them for the services exported by them. Sl. No. OIO No./Dt.
Refund Claim Claim Period
1. 234/2011 dt.27.4.2011 Rs.5,08,061/-
01/2009 - 03/2009
2. 233/2011 dt.27.4.2011 Rs.1,85,561/-
16.5.2008 - 30.6.2008 Rs.5,03,779/-
07/08 - 09/08 Rs.5,78,014/-
10/08 - 12/08
3. 578/2012 dt.16.7.2012 Rs.18,65,456/-
10/10 3/11
4. 734/2012 dt.31.8.2012 Rs.6,37,815/-
04/10 - 06/10
5. 733/2012 dt.31.8.2012 Rs.6,37,815/-
04/10 06/10 Thereafter a show-cause notice was issued to the assessee proposing to reject the refund claims on account of non-fulfillment of conditions laid down under Notification No.5/2006. The show-cause notice was adjudicated by the Assistant Commissioner vide his Order-in-Original dated 27.4.2011 by rejecting the refund claim in toto on the ground that the unit was not registered for the claimed period. The assessee got the registration on 5.2.2009 which shows that the activity of export of services have not been undertaken in the registered premises. Aggrieved by the Order-in-Original, the assessee filed appeal before the Commissioner (A) who held that the issue of non-registration cannot be a ground for rejecting refund claim relying upon the decision in the case of M/s. mPortal India Wireless Solutions Pvt. Ltd. vs. CST, Bangalore: 2012 (27) STR 134 (Kar.) wherein it has been held that registration with the department is not a pre-requisite for the assessee for claiming refund of CENVAT credit. Assessee would be entitled to the refund of unutilised credit only if proof is provided that service tax has been paid on the input services and the Commissioner (A) further gave an opportunity to the appellant to prove the relevance of unutilized registered premises to their export activity and for lower adjudicating authority to consider the same while processing the claim in remand and allowed the appeal to that extent. Aggrieved by the said order, the Revenue has filed the present appeals.
3. Heard learned AR and none appeared on behalf of the assessee.
4. The learned AR submitted that as per Section 69 of the Finance Act which requires every person who is liable to pay service tax to seek registration under the service tax provisions and to pay the service tax accordingly. He further submitted that for paying the service tax, a service tax registration is a must and if the assessee is not registered then he is not entitled for refund under Rule 5. Further, he referred to various Rules provided in CCR, 2004 to buttress his argument that registration number is a must for the assessee to claim refund. He also tried to distinguish the judgments in the case of mPortal Wireless Solutions Pvt. Ltd. which has been relied upon by the Commissioner (A) to give relief to the assessee.
5. After considering the submissions of the learned AR and after going through the impugned order, I am of the view that the issue is no more res integra in view of the judgment of the Honble Karnataka High Court in the case of mPortal Wireless Solutions Pvt. Ltd. vs. CST: 2012 (27) STR 134. In this regard, it is pertinent to reproduce relevant findings of the Commissioner (A) which is contained in para 10 of the impugned order. Para 10 is reproduced herein below:
10. As regards the issue that since service tax registration on ITSS is t~: only on 05-02-2009, refund is therefore not eligible for the period prior obtaining registration, I find that this issue stands settled by the Honble Karnataka High Court in the case of M/s mPortal India Wireless Solutions Pvt. Ltd., Vs. CST, Bangalore 2012(27) STIR 134 (Kar.) , which has held "insofar as requirement of registration with the department as a condition precedent for claiming cenvat credit is concerned, learned counsel appearing both parties were unable to point out any provision in n the Cenvat Credit Rule which impose such restriction. In the absence of a statutory provision which' prescribes that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund, the three authorities committed a serious error in rejecting the claim for refund on the ground which is not existence in law". In the same judgment the Hon'ble High Court also held that while there is no requirement for claiming input service credit only after registration, this does not automatically imply that the appellant (in this case. M/ s mPortal) would be eligible for the refund of the unutilized input credit. The appellant would be entitled to the refund of the unutilized credit only if proof is provided that service tax has indeed been paid on the input services. Thereby. this judgment lays down the principle that there is no restriction in availing cenvat credit before registration is granted, and that registration with the department, whether it is registration of the business premises or registration of the output services, is not a pre-requisite for the appellant to claim input service credit. Therefore, if availment of cenvat credit is itself not a bar, ipso facto, it follows that denial of refund of this cenvat credit availed on input services on grounds of non-registration either of the input services or the business premises as is the case here, is not justified. However, following the ratio of the judgment, this does not automatically entitle a claimant (in this case the appellant) to the refund of the said cenvat credit. The appellant will have to prove before the original adjudicating authorities that service tax has indeed been paid on these input services. In view of the judgment of the Honble Karnataka High Court in the case of mPortal Wireless Solutions Pvt. Ltd. cited supra, which has been relied upon by the Commissioner (A), I am of the view that there is no infirmity in the impugned order which needs interference by this Tribunal. Therefore, I uphold the impugned order and dismiss both the appeals of the Revenue.
(Operative portion of the Order was pronounced in Open Court on 15/02/2017.) S.S GARG JUDICIAL MEMBER rv 6