Custom, Excise & Service Tax Tribunal
M/S Alliance Global Services It India ... vs The Commissioner on 8 February, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench Single Member Bench Court I Appeal No.ST/2689/2012 (Arising out of Order-in-Appeal No.148/2012(HYD-IV)S.Tax, dated 21-06-2012 passed by Commissioner of C&.CE(Appeals-II) Hyderabad) For approval and signature: Humble 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. Hyderabad. ..Appellant(s) Vs. The Commissioner. C,C.E&ST, Hyderabad-IV ..Respondent(s)
Appearance Shri Abhishek Rastogi & Ms. Rashi Despande, Advocates for the Appellant Ms. Spurthi, AR for the Respondent Coram:
Honble Ms. Sulekha Beevi, Member(Judicial) Date of Hearing : 08/02/2016 Date of decision: 08/02/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.]
1. The appellant is aggrieved by the rejection of refund claim filed for the unutilized Cenvat credit.
2. The appellants are 100% EOU and are registered with the service tax department. They filed refund claim for Rs.4,31,260/- for the period December, 2010 being the unutilized Cenvat credit of service tax paid on input services under Rule 5 of the Cenvat Credit Rules, 2004 r/w Notification No.5/2006-CE-NT, dated 14-03-2006. The adjudicating authority rejected the refund claim on the ground that the input services does not have nexus with output services and that there is no one to one correlation of the inward remittances with the export invoices. The appellants carried the issue in appeal and vide the order impugned herein, the Commissioner (Appeals) upheld the same. Hence this appeal.
3. On behalf of the appellants, the learned counsel Ms. Rashi Despande explained the nature of the various services availed by appellant and how they are related and essential for appellant for providing the output services. The category wise table of input services furnished by appellant counsel is as below.
S.No. Category of services Amount(INR)
1. Security Agency Services 20,776
2. Management or Business consultants Services 5,337
3. Management , Maintenance or repair srvicesa 40,155
4. Telecommunication services 55,970
5. Renting of Immovable Property services 242,878
6. Business Support Services 578
7. Manpower Recruitment or supply Agencys Services 39,727
8. Courier services 1,334
9. Chartered Accountant Services 10,300
10. Internet Telecommunication Services 587
11. Information Technology Software services 13,619 Grand Total 431,261
4. She argued that the lower authorities have interpreted the definition of input service in an erroneous manner. The appellant is a provider of service and not a manufacturer. Whereas, the authorities below have held that the impugned input services are not going to make any difference to the production of final products and therefore do not qualify as input services. They have erred in relying on the judgments like Maruthi Suzuki Ltd Vs CCE Delhi IIII-2009(240) ELT 641(SC) and Vandana Global Ltd case 2010(253) ELT 440(Tri.LB) as these case deal with inputs and not input services. She argued that all the services listed in the table have been held to be eligible for credit/refund as has been held by the various judgments laid in Coca Cola India Ltd Pune Vs CCE, Pune-III,2009-TIOL-449-HC-Mum-ST, CCE Bangalore Vs M/s CE Gloves India Ltd and others 2013-TIOL-1975-CESTAT-Bang. She drew support from the proposition laid in CST, Delhi Vs M/s Convergys India (P)Ltd 2009-TIOL-888-Cestat-Del to put forward the submission that different yardsticks cannot be applied for permitting to avail credit and for granting refund. Further that for subsequent period, the original authority has granted refund for services like security agency services, manpower recruitment service, renting of immovable property services, information technology services and Management or Business Consultants services. With regard to the issue that there is no one to one co-relation with FIRC and export invoices, it is submitted that the appellant maintains a running account and the inward remittances are adjusted. The department does not dispute the exports or the inward remittances received. The Board vide Circular No.112/06/2009-ST dated 12-03-2009 has clarified that in case where FIRC are issued on consolidated basis, the exporter should submit self-certified statement along with FIRC showing the details of export in respect of which the FIRC pertains. That, appellants had submitted such self certified copy along with necessary documents. That the authorities below failed to consider these documents inspite of the Board Circular. She pleaded that the appeal may be allowed.
5. Against this, the learned AR Ms. Spurthi supported the findings in the imugned order . She contended that the definition of input services in the case of provider of output services is to be interpreted in a restrictive manner. That appellants have not established the nexus with the final product and so are not eligible for credit/refund. She placed reliance on the judgment laid in Maruthi Suzuki India Ltd(supra).
6. I have heard the rival submissions. At the outset it has to be stated that the period involved is prior to 01-04-2011 when the definition of input services had a wide ambit as it included the words activities relating to business Almost all these services listed in the table have been held to be eligible for credit/refund by various judgments. CCE, Guntur Vs Hindustan Coca Cola Beverages (P)Ltd Bangalore 2011-TST-302-Cestat Bang. CCE, Bangalore-III Vs Stanzen Toyotetsu India(P)Ltd 2011-TIOL-868-HC-KAT and M/s CE Gloves India (P)Ltd and others (supra) are some of the judgments which have discussed the services listed in the table and held to be eligible for credit/refund. The appellant has explained that without availing these services, it is not possible to render the output services effectively. Further, in M/s Convergys (India) (P)Ltd case(supra) it has been held that there cannot be two different yardsticks for permitting credit and for granting rebate/refund. Whatever credit has been permitted to be taken, the same are permitted to be utilized and when it is not possible to utilize the credit, there is provision for granting rebate or refund. In addition, in the appellants own case, for subsequent period, the original authority vide order dated 24-02-2012 and 28-09-2012 has granted refund in respect of Security Agency Services, Manpower Recruitment Services, Renting of Immovable Property Services, Information Technology Software Services and Management or Business Consultants Services. This tribunal vide order dated 21-01-2016, have decided the same issue for a different period in favor of the appellant in appellants own case in Appeal No.ST/1434/2012. The Commissioner (Appeals) though observed that there is no necessity to have one to one correlation with FIRC and export invoices, but has remanded the mater to original authority for verification which in my view is not legal and proper. The board Circular clarified that the exporter has to submit a self certified statement and appellants have submitted such self certified statement.
7. Taking into account, the facts and the judicial dispositions as discussed above, I find that denial of credit is unjustified. In the result, the impugned order is set aside. The appeal is allowed with consequential reliefs, if any.
(Pronounced in open court)
( SULEKHA BEEVI. C.S.)
MEMBER(JUDICIAL)
Dks..
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