Custom, Excise & Service Tax Tribunal
Volvo India Pvt Ltd vs Commissioner Of Central ... on 15 October, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 21893 / 2014 Appeal(s) Involved: ST/2357/2010-DB [Arising out of OIA No.36-2010 dated 25/08/2010 passed by Commissioner(Appeals) LTU, Bangalore ] VOLVO INDIA PVT LTD YALACHAHALLI, TAVAREKERE POST, HOSKOTE, BANGALORE 561022 Appellant(s) Versus Commissioner of Central Excise,Customs and Service Tax BANGALORE-LTU NULL 100 FT RING ROAD JSS TOWERS, BANASHANKARI-III STAGE, BANGALORE, - 560085 KARNATAKA Respondent(s)
Appearance:
Shri G. Shivadass, Advocate For the appellant Shri R. Gurunathan, Addl. Commissioner(AR) For the respondent CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Date of Hearing: 15/10/2014 Date of Decision: 15/10/2014 Order Per : B.S.V.MURTHY The appellant is providing information technology and information technology enabled service like infrastructure support service under three agreements with foreign entities. The appellants received various input services at their STPI unit and paid service tax thereon and the issue involved before us is the eligibility of the appellant for the refund of CENVAT credit which they could not utilize for payment of tax on output services and hence claimed as refund as per the provisions of Notification No.5/2006 NT dt. 14/3/2006 under Rule 5 of CENVAT Credit Rules, 2004(CCR).
2. The learned counsel submits that the credit has been denied only on two grounds. The first ground is that the accumulated credit could have been transferred to their manufacturing unit and therefore the appellant is not eligible for the credit. Learned AR vehemently supported this argument and submitted that the appellants have their own manufacturing unit in India and that appellant is registered with LTU and therefore in accordance with provisions of Rs.12AA of CCR, they could have transferred the excess credit to the manufacturing unit. He draws our attention to the observations of the original authority wherein he has stated that the appellant could have transferred the credit to the manufacturing unit and therefore refund cannot be allowed. On the other hand, learned counsel on behalf of the appellants submits that the appellant had been addressed a letter and in their reply to the letter dt. 22/06/2009, they had informed the Assistant Commissioner that credit available with their Hoskote Plant is far in excess of their requirement and that any further transfer will result in further accumulation of credit. Nevertheless a show-cause notice was issued and in the show-cause notice, there was no mention of the transfer of the credit to the manufacturing unit. However in the OIO, the original adjudicating authority did not conduct any further verification or did not raise any further query but simply proceeded to take a view that the credit could have been transferred to the manufacturing unit. We find that the observation of the original authority is only a presumption that the manufacturing unit could have utilised the credit. When a specific claim was made that there was excess credit with the manufacturing unit, the least that the original authority could have done was to ask for details which could have been easily furnished by the appellant. Today in fact the learned counsel submitted that in ER1 return filed monthly, the appellants were showing substantial excess credit available with them. After hearing both the sides for quite sometime during which the learned AR vehemently argued and after considering the provisions of law, we consider that the view taken that Hoskote Unit could have utilised the credit cannot be sustained. Therefore this ground for rejection cannot be sustained. The second ground taken is that there is no nexus between the input services and output service and there have been changes in the law, notification, retrospective amendment of the notification and subsequent decisions taking specific view about the various services and their nexus with the output services which we have discussed in the Interim Order No.79-152/2014 dt. 29/08/2014 passed in the case Apotex Ltd. & others. It is felt that the original adjudicating authority should consider the nexus in the light of the decision of the Tribunal in the Interim Order and other decisions that may be cited before him and on the basis of facts of this case. The appeal is decided in above terms.
(Operative portion of the order has been pronounced in open court) S.K. MOHANTY JUDICIAL MEMBER B.S.V.MURTHY TECHNICAL MEMBER Raja.
3