Custom, Excise & Service Tax Tribunal
Temenos India Pvt Ltd vs Cst Ch - Iii on 6 February, 2020
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT NO. IV
Service Tax Appeal No. 41304 of 2017
(Arising out of Order-in-Appeal No. 96/2017 (STA-I) dated 28.02.2017 passed by the
Commissioner of Service Tax (Appeals-I), Newry Towers, 2054/1, II Avenue, 12th Main
Road, Anna Nagar, Chennai - 600 040)
M/s. Temenos India Private Limited, : Appellant
No. 146, Sterling Road,
Nungambakkam, Chennai - 600 034
VERSUS
The Commissioner of Service Tax, : Respondent
Chennai-III Commissionerate, Newry Towers, No. 2054/1, II Avenue, 12th Main Road, Anna Nagar, Chennai - 600 040 WITH
(i) Service Tax Appeal No. 41537/2017 (Temenos India Pvt. Ltd.); (Arising out of common Orders-in-Appeal No. 184, 185, 186, 187 & 188/2017 (STA-I) dated 31.03.2017 passed by the Commissioner of Service Tax (Appeals-I), Newry Towers, 2054/1, II Avenue, 12th Main Road, Anna Nagar, Chennai - 600 040)
(ii) Service Tax Appeal No. 41538/2017 (Temenos India Pvt. Ltd.); (Arising out of common Orders-in-Appeal No. 184, 185, 186, 187 & 188/2017 (STA-I) dated 31.03.2017 passed by the Commissioner of Service Tax (Appeals-I), Newry Towers, 2054/1, II Avenue, 12th Main Road, Anna Nagar, Chennai - 600 040)
(iii) Service Tax Appeal No. 41539/2017 (Temenos India Pvt. Ltd.); (Arising out of common Orders-in-Appeal No. 184, 185, 186, 187 & 188/2017 (STA-I) dated 31.03.2017 passed by the Commissioner of Service Tax (Appeals-I), Newry Towers, 2054/1, II Avenue, 12th Main Road, Anna Nagar, Chennai - 600 040)
(iv) Service Tax Appeal No. 41540/2017 (Temenos India Pvt. Ltd.); (Arising out of common Orders-in-Appeal No. 184, 185, 186, 187 & 188/2017 (STA-I) dated 31.03.2017 passed by the Commissioner of Service Tax (Appeals-I), Newry Towers, 2054/1, II Avenue, 12th Main Road, Anna Nagar, Chennai - 600 040)
(v) Service Tax Appeal No. 41541/2017 (Temenos India Pvt. Ltd.); (Arising out of common Orders-in-Appeal No. 184, 185, 186, 187 & 188/2017 (STA-I) dated 31.03.2017 passed by the Commissioner of Service Tax (Appeals-I), Newry Towers, 2054/1, II Avenue, 12th Main Road, Anna Nagar, Chennai - 600 040) 2 APPEARANCE:
Shri. K. Sivarajan, Consultant for the Appellant Ms. Sridevi Taritla, Authorized Representative (A.R.) for the Respondent CORAM:
HON'BLE MR. C. J. MATHEW, MEMBER (TECHNICAL) HON'BLE MR. P. DINESHA, MEMBER (JUDICIAL) FINAL ORDER NOs. 40085-40090 / 2020 DATE OF HEARING: 11.12.2019 DATE OF DECISION: 06.02.2020 Order Per : Hon'ble Mr. P. Dinesha By these appeals, the assessee is challenging the partial denial of refund in respect of the input credit availed on various services. After hearing both sides and since common facts are involved and the issue in all these appeals relates to refund but for different periods, the same are taken up together for common disposal.
2. The issue vis-à-vis the period of dispute are summarized in the form of a table, for convenience:
Period Appeal No. Order-in- Order-in- Grounds of covered Original No. Appeal No. Rejection July ST/41304/2017 OIO No. OIA No. (a) Ineligible 2010 to 137/2015(R) 96/2017(STA input services Sep' dated -I) dated (b) Missing input 2010 20.11.2015 28.02.2017 invoices
(c) Invoices for unregistered premises Oct' ST/41537/2017 OIO No. OIA Nos. (a) Ineligible 2010 to 27/2016(R) 184, 185, input services Dec' dated 186, 187 & (b) Missing input 2010 17.02.2016 188/2017 invoices (STA-I) dated (c) Invoices for 31.03.2017 unregistered premises
(d) Input invoice not matching with CENVAT Register
(e) Incorrect amount on 3 invoice when compared with CENVAT Register Jan' ST/41538/2017 OIO No. (a) Ineligible 2011 to 28/2016(R) input services Mar' dated (b) Invoices for 2011 18.02.2016 unregistered premises Apr' ST/41539/2017 OIO No. (a) Ineligible 2011 to 81/2016(R) input services June dated (b) Missing input 2011 24.03.2016 invoices
(c) Invoices for unregistered premises
(d) Excess Input Credit claimed July ST/41540/2017 OIO No. (a) Ineligible 2011 to 120/2016(R) input services Sep' dated (b) Missing input 2011 11.04.2016 invoices
(c) Invoices for unregistered premises Oct' ST/41541/2017 OIO No. (a) Ineligible 2011 to 128/2016(R) input services Dec' dated (b) Missing input 2011 04.05.2016 invoices
(c) Incorrect invoice
(d) Invoices for unregistered premises
3. When the matter was taken up for hearing, Shri. K. Sivarajan, Learned Consultant, appeared for the assessee-appellant and Ms. Sridevi Taritla, Learned Joint Commissioner (Authorized Representative), appeared for the Revenue.
4. Common facts which are not in dispute, inter alia are that the appellant filed applications for refund under Rule 5 of the CENVAT Credit Rules, 2004 of the unutilized input Service Tax credit; that after due process, vide respective Orders-in-Original, substantial refund was granted, however, rejecting a part thereof for the reasons as indicated in column no. 5 of the above table; that the dates of the invoices cover periods both prior to 01.04.2011 and post 01.04.2011, etc. However, the first 4 three appeals covering the periods from July 2010 to September 2010, October 2010 to December 2010 and January 2011 to March 2011 are clearly prior to the date of amendment.
5.1.1 Learned Consultant for the appellant submitted in respect of Service Tax Appeal Nos. 41537 to 41541 of 2017 that the First Appellate Authority vide impugned order dated 31.03.2017 has directed some more refund, but however, he has upheld the denial in respect of impugned services for want of nexus thereby partly allowing the appeals.
5.1.2 Learned Consultant submitted at the outset that the denial of input credit on the ground of unregistered premises has been settled by the Hon'ble High Court of Judicature at Madras in the following cases:
(i) The Commissioner of G.S.T. & C.Ex., Chennai v. BNP Paribas Sundaram Global Securities Operations Pvt. Ltd.
[2018 (6) TMI 676 - Madras High Court];
(ii) C.S.T.-III, Chennai v. Reed Elsevier Pvt. Ltd. [2018 (8) G.S.T.L. 355 (Mad.)];
(iii) Scionspire Consulting Services (I) P. Ltd., Chennai v.
C.S.T.-III [2017 (4) T.M.I. 943 - Madras High Court];
(iv) Verizon Data Services India Pvt. Ltd. v. CESTAT [2017- TIOL-1241-HC-MAD-ST] 5.2.1 With regard to the denial of input credit alleging ineligible input services, Learned Consultant contended that the definition of "input service" is having a wide ambit and only those services which are specifically excluded could be considered as ineligible services; that in any case, the rejection for the first three appeals is bad.
5.2.2 Learned Consultant also relied on the following decisions in his support to contend that even post 01.04.2011, the courts have held in respect of the impugned services that the assessee need not establish nexus :
5(i) Coca Cola India Pvt. Ltd. v. C.C.E., Pune-III [2009-
TIOL-449-HC-MUM-ST];
(ii) C.C. & C.Ex., Hyderabad-IV v. Deloitte Tax Service India Pvt. Ltd. [2012-TIOL-954-HC-AP-ST];
(iii) C.C.E. & S.T., Bangalore v. ABB Ltd., Vadodara [2011- TIOL-395-HC-KAR-ST];
(iv) Shell India Markets Pvt. Ltd. v. C.C.E., Bangalore [2012 (28) S.T.R. 87 (Kar.)];
(v) C.C.E., Hyderabad-IV v. Deloitte Tax Services India Pvt. Ltd. [2008 (11) S.T.R. 266 (Tri. - Bang.)];
(vi) ABB Ltd. v. C.C.E. & S.T., Bangalore [2009 (15) S.T.R. 23 (Tri. - LB)];
(vii) Dell International Services India Pvt. Ltd., Bangalore v. C.C.E., Bangalore [2009-TIOL-1957- CESTAT-BANG];
(viii) Scope International Pvt. Ltd. v. C.C.E., Chennai [2018 (7) T.M.I. 1007 - CESTAT Chennai]'
(ix) KLA Tencor Software India Pvt. Ltd. v. C.S.T., Chennai-
III [2016 (6) T.M.I. 447 - CESTAT Chennai] 5.2.3 He further contended, without prejudice to his other contentions, that the Revenue has only denied the refund in respect of the above services without questioning the eligibility, but for want of nexus and in this regard, he relied on the decision of the Mumbai Bench of the Tribunal in the case of M/s. Affinity Express India Pvt. Ltd. v. Commr. of Central Excise, Pune-I reported in 2015-TIOL-1778-CESTAT-MUM.
5.3 With regard to the denial of refund on the ground of the CENVAT Credit not being disclosed in the ST-3 return, Learned Consultant inter alia submitted that the non-disclosure was only a procedural lapse; that such credits had already been included in the Books of Account and in the appellant's CENVAT Credit Register and that the same was duly certified by a Chartered Accountant. In this regard, he relied on the decision of the Bangalore Bench of the Tribunal in the case of M/s. Target Corporation India Pvt. Ltd. v. Commissioner of Central 6 Tax, Bangalore East reported in 2019 (10) T.M.I. 1148 - CESTAT Bangalore.
6. Per contra, Learned Authorized Representative for the Revenue supported the findings of the lower authorities.
7. We have heard the rival contentions, perused the documents placed on record and also the decisions relied upon during the course of arguments.
8.1 With regard to the issue of denial of input credit for want of registration, we find that this issue is covered by the decision of the Chennai Bench of the Tribunal, in the appellant's own case although for a different period, in Service Tax Appeal No. 40675 of 2016 (vide Final Order No. 41063 of 2018 dated 09.04.2018) and this Bench, after following the decision of the Hon'ble High Court of Judicature at Madras in the case of Commissioner of Service Tax-III v. CESTAT, Chennai [2017 (3) G.S.T.L. 45 (Mad.)], has ruled in favour of the assessee.
8.2 In view of the above, we are of the view that the denial of refund for want of registration of the premises is bad. The impugned order to this extent cannot be sustained and consequently, the same is set aside.
9.1 With regard to the issue of denial of input credit on the ground of ineligibility/want of nexus, we find that the following services are relevant for our consideration, as indicated at paragraph 7(i) of the impugned order dated 31.03.2017 :
(i) Gardening Service
(ii) Housekeeping Service
(iii) Transport Charges
(iv) Labour Charges for bore-well
(v) Vehicle Hire Charges
(vi) Temenos day expenses
7
(vii) Interior Consultancy
(viii) Partition work
(ix) Insurance Service
(x) Hotel Expenses
(xi) Other rental charges
(xii) Electrician and Plumber
(xiii) Tour Operator Service
(xiv) Pest Control Service
(xv) Car Parking Charges
(xvi) AMC Charges
(xvii) External Consultant
9.2 We find that some of these services are covered by
the decisions of various judicial fora, and are dealt with in the following manner :
Gardening Service :
This issue was dealt with by the Ahmedabad Bench of the Tribunal in the case of M/s. Murugappa Morgan Thermal Ceramics Ltd. v. Commissioner of Central Excise, Ahmedabad-III [2013 (4) T.M.I. 384 - CESTAT Ahmedabad] wherein the Tribunal held that the appellant was required to maintain a garden which is an obligation under the relevant pollution control law and CENVAT Credit with respect to the services used for maintaining the garden would therefore be admissible.
Housekeeping Service :
This issue is covered by the decision of the Delhi Bench of the Tribunal in Commissioner of Central Excise, Delhi-III v. M/s. Hero Honda Motors Ltd.
8[2014 (5) T.M.I. 724 - CESTAT New Delhi] wherein the Bench has ruled in favour of the assessee.
Transport Charges :
In Commissioner of Customs & Central Excise, Hyderabad-III v. M/s. Gray Gold Cements Ltd. [2014 (9) T.M.I. 673 - Andhra Pradesh High Court], the Hon'ble High Court has held that the credit of input service tax on Transportation Charges is proper.
Maintenance Charges - (Labour charges for bore-well, Interior Consultancy, Partition work, Electrician and Plumber) :
The above services can be comfortably clubbed under 'Maintenance Charges' and are covered by the decision of the Bangalore Bench of the Tribunal in M/s. Kirloskar Systems Ltd. v. Commissioner of Service Tax, Bangalore [2014 (35) S.T.R. 552 (Tri.
- Bang.)].
Pest Control Service :
The above service, according to us, is very much essential for maintaining a healthy atmosphere in the working premises/factory premises and hence, this would be an essential input service. We therefore find that there is direct nexus of this input service with the output service.
Car parking Charges :
The above service was held to be an eligible input service by the Mumbai Bench of the Tribunal in M/s. PTC Softwares (India) Pvt. Ltd. v. Commissioner of Central Excise, Pune-III [2014 (35) S.T.R. 632 (Tri. - Mum.)] stating that car parking is part of the business premises of the appellant and is a business expenditure.9
AMC Charges :
The Bangalore Bench of the Tribunal in the case of M/s. ADC India Communication Ltd. v. Commissioner of Central Excise, Bangalore [2012 (12) T.M.I. 388 - CESTAT Bangalore] has held that Annual Maintenance Contract (AMC) has nexus with manufacture of products and also that AMC for computers are used for manifold purposes in connection with manufacture and clearance of products. In view of the above requisite nexus, the Bench held that the assessee was entitled to take credit of the Service Tax paid.
In view of the above, we find that the denial, insofar as the above input services are concerned, is not in order and accordingly, direct the authorities to allow the refund of credit on these services.
9.3 However, in respect of the other services namely :
Order-in-
Original No. & Ineligible Input Service
Date
27/2016 (R) Temenos Day Expenses
dated Vehicle Hire Charges
17.02.2016
28/2016 (R) Insurance Service
dated
18.02.2016
81/2016 (R) Hotel Expenses paid to M/s. Kuoni
dated Business Travel India Pvt. Ltd., and
24.03.2016 payments to other service providers
120/2016 (R) Services by Hotel for short-term
dated accommodation,
11.04.2016 Tour Operator Service paid to M/s. Kuoni
Business Travel India Pvt. Ltd.
128/2016 (R) Communication Charges
dated Other Rental Charges
04.05.2016 Travel Charges
the denial of refund of input credit is required to be upheld for want of explanation insofar as the nature and purpose of the above services has not been explained by the assessee. Hence, we uphold the findings in the impugned order.10
9.4 Further, even in respect of the service of 'External Consultant' which is denied vide Order-in-Original No. 128/2016 (R) dated 04.05.2016 on the ground of Incorrect Invoice/Excess Credit, we see no explanation offered by the assessee and hence, the denial of refund is upheld.
10. With regard to the issue of non-disclosure of CENVAT Credit in the ST-3 returns, we find that the appellant had contended that the credits were included in the CENVAT Credit Register, which fact has not at all been denied by the authorities below. In this regard, we find the decision in M/s. Target Corporation India Pvt. Ltd.
(supra) to be very much apt wherein, the co-ordinate Bangalore Bench has inter alia ruled that the denial of refund only on the basis of non-disclosure of CENVAT Credit in ST-3 return was not legally sustainable, in the following words:
"5. After considering the submissions of both the parties and perusal of the material on record, I find that the only ground for which refund has been rejected is that the appellant has not disclosed the cenvat credit in ST-3 returns. Now the question arises can the non-disclosure or delay in disclosure in ST-3 returns, the assessee looses his right to claim cenvat credit or not? In the present case, I find that after going through the various conditions set out in the appendix to the Notification 5/2006 issued under Rule 5 of Cenvat Credit Rules, 2004 and Rule 4 and Rule 9 of Cenvat Credit Rules, I find that appellant has filed all the necessary documents for claiming the cenvat credit viz. invoices, books of accounts, cenvat credit register which are required as per the various Rules and the Notification to claim cenvat credit but inadvertently he has failed to disclose the same in the ST-3 return which is only a procedural infraction in view of various judgment relied upon by the appellant cited supra. Further I find that under the Notification as well as under the Rule, it has not been categorically provided that non-disclosure of cenvat credit in the ST-3 return will disentitle the assessee from claiming the cenvat credit if he is otherwise entitled to. Further I find that the cenvat credit is a beneficial legislation and it should be construed liberally so as to upheld the letter and spirit of such beneficial piece of legislation and a narrow interpretation would read down the benefit given by the legislature and defeat the very purpose of enacting of such beneficial legislation. Therefore, the denial of the refund only on the basis of non-disclosure of the cenvat credit in ST-3 return is not legally sustainable and therefore, I set aside the rejection of refund on this ground. Further I find that the Commissioner (Appeals) in the impugned order has observed that the appellants have not submitted any 11 documents to prove their contention that they have rightly availed the cenvat credit. It appears that both the authorities have not examined all the documents which have been filed by the appellant in support of their refund claim. In view of this, I set aside the impugned order and remand the matter back to the original authority to examine the refund claim on the basis of other documents filed by the appellant. Accordingly, both the appeals are allowed by way of remand to the original authority. The original authority will provide adequate opportunity to the appellant to produce all the documents which they may rely in support of their refund. Consequently, both the appeals are allowed by way of remand."
Following the above ratio, we set aside the impugned order to this extent also and allow the claim of the assessee on this ground.
11. The appeals are partly allowed to the extent indicated above.
(Order pronounced in the open court on 06.02.2020) Sd/- Sd/-
(C.J. MATHEW) (P. DINESHA) MEMBER (TECHNICAL) MEMBER (JUDICIAL) Sdd