Custom, Excise & Service Tax Tribunal
Mercedes Benz Research And Development ... vs Commissioner Of Service Tax ... on 1 September, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/27886/2013-SM [Arising out of Order-in-Appeal No. 231-2013 dated 28/06/2013 passed by Commissioner of Service Tax , BANGALORE ] For approval and signature: HON'BLE SHRI S.S GARG, JUDICIAL MEMBER 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 Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Mercedes Benz Research And Development India Pvt Ltd Whitefield Palms Plot No 9 & 10, Epip Zone, Phase-1. Whitefield Road, BANGALORE - 560066 KARNATAKA Appellant(s) Versus Commissioner of Service Tax BANGALORE-SERVICE TAX 1ST TO 5TH FLOOR, TTMC BUILDING, above BMTC BUS STAND,DOMLUR BANGALORE, - 560071 KARNATAKA Respondent(s)
Appearance:
Mr. Vrij Ghosh, C.A. For the Appellant Mr. Pakshi Rajan, A.R. For the Respondent Date of Hearing: 01/09/2016 Date of Decision: 01/09/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20715 / 2016 Per : S.S GARG The Revenue has filed the present appeal against the order-in-appeal No. 229-234/2013 dated 28.06.2013 passed by Commissioner (Appeals-II), Bangalore.
2. Briefly the facts of the present case are that the appellant is engaged in providing information technology service which is designed to deal with user defined problems in accordance with the respective order placed by its group company located outside India. The appellant is registered as provider of service under the taxable service category of information technology software services along with other services. The appellant during the period July 2009 to September 2009 provided the services to M/s Daimler AG qualified as exports under Rule 3(iii) of Export of Services Rules, 2005 without payment of service tax in terms of Rule 4 and thereafter they filed refund application under Rule 5 of CENVAT Credit Rules 2004 for an amount of Rs 47,45,995/- for the period July 2009 to September 2009. Thereafter a show-cause notice was issued to the appellant for denying the refund of CENVAT credit under Rule 5. Thereafter Assistant Commissioner of Service Tax passed order dated 28.03.2011 holding that the appellant had exported information technology software service during the relevant period and fulfilled the terms and conditions mentioned in the Export Rules and sanctioned the refund amounting to only Rs 5,53,639 and rejected the refund amounting to Rs 41,92,296. Aggrieved by the said order, appellant filed appeal to the extent of balance claim disallowed and the Commissioner (Appeals) vide his order dated 28.06.2013 granted the balance claim which was disallowed by order-in-original apart from refund in relation to scientific and technical consultancy service which has been considered as ineligible input service on the finding that the same is not an essential input service for providing output services exported. Being aggrieved by the impugned order to the extent of rejection of refund claim amounting to Rs 4,94,049, appellant has filed the present appeal.
3. Heard both the parties and perused the records. Learned counsel for the appellant submitted that to the extent of the rejected refund, the impugned order is non-speaking and the learned Commissioner has not given any cogent reason as to how refund claim amounting to Rs 4,94,049/- paid as service tax on the input service of scientific and technical consultancy are not used for providing the output services rendered when it is an admitted fact that the appellant is only into export of taxable services and all the services are used in relation to the same. Learned counsel for the appellant submitted that definition of input service as contained in Rule 2(l) of CENVAT Credit Rules 2004 includes Scientific and Technical Consultancy Services and the appellant has procured these services from vendors for innovation and technology transfer which are in relation to state of impact of accidents/trauma on the womens body in case of an accident suffered in a car. Such services are essential and directly related to designing automobiles which is an output services of the company. In support of his claim, the counsel relied upon the following judgments:
i) Coca cola India Pvt Ltd Vs CCE Pune [2000-TIOL-449-HC-MUM-ST]
ii) Goodyear India Ltd Vs CC [1997(95)ELT 450(SC)]
iii) ISMT Ltd Vs CCE &C Aurangabad [2010-20-STR 68(Tri-Mum)]
iv) Victor Gasket India Ltd [2008(10)STR 369(Tri)]
v) CCE Vs GTC Industries [2008(12)STR 468(Tri-LB)]
vi) CCE Vs STanzen Toyotetsu India (P) Ltd [2009(13)STR 289(Tri)] After hearing both the parties and on perusal of the records and judgments cited supra, I am of the considered opinion that the learned Commissioner (Appeals) has wrongly rejected the CENVAT credit on scientific and technical consultancy services without any basis holding that the said service is not an input service. Whereas in my opinion, this service is very much a part of the input service and it is directly linked with the output service of the company and therefore, I allow the appeal of the appellant and set aside the impugned order with consequential relief if any.
(Order pronounced in open court) S.S GARG JUDICIAL MEMBER pnr 4