Custom, Excise & Service Tax Tribunal
Ivy Comptech Pvt Ltd vs Commissioner Of Central Excise, ... on 6 May, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/1194/2011-SM, ST/752/2012-SM [Arising out of Order-in-Appeal No. 172-2010 dated 21/01/2011 passed by CC,CE&ST(Appeals-II), Hyderabad] [Arising out of Order-in-Appeal No. 92-2011 dated 21/12/2011 passed by CC,CE&ST(Appeals-II), Hyderabad ] For approval and signature: HON'BLE SHRI B.S.V.MURTHY, TECHNICAL 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? IVY COMPTECH PVT LTD ROAD NO.2, BANJARAHILLS, HYDERABAD. Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax HYDERABAD-II NULL L.B STADIUM ROAD, BASHEERBAGH, HYDERABAD, - 500004 ANDHRA PRADESH Respondent(s)
Appearance:
Shri Rajesh Kumar, CA HIRAGANGE & ASSOCIATES #1010, 1st floor(Above Corp.Bank) 26th Main, 4th T Block, Jayanagar, BANGALORE - 560041 KARNATAKA For the Appellant Shri Pakshi Rajan, Asst. Commissioner(AR) For the Respondent Date of Hearing: 06/05/2015 Date of Decision: 06/05/2015 CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER Final Order No. 21100-21101 / 2015 Per : B.S.V.MURTHY In both the appeals, issue involved is same and therefore both the appeals are taken together and a common order is being passed. The appellants are engaged in providing information technology software services (ITSS). The entire service is provided to customers located outside India and it is the claim of the appellants that all the services are exported. On this basis, the appellants filed claim for rebate of the CENVAT credit availed by them on various input services under Notification No.11/2005-ST. A portion of the rebate claim has been rejected on the ground that the appellant cannot not avail CENVAT credit on hotel bills, air travel, employees insurance, repair of vehicles, hospitality service. Further some of the amounts have also been rejected on the ground that the documents on the basis of which credit has been taken are not in compliance with the provisions of Rule 9 of CENVAT Credit Rules.
2. Learned Chartered Accountant on behalf of the appellants submitted that Notification No.11/2005-ST under which rebate claim was made has no condition requiring the verification of correctness of CENVAT credit availed. However in the show-cause notice, the Assistant Commissioner had proposed to deny the CENVAT credit on various services on the ground of nexus. He submits that in this case, the Assistant Commissioner had exceeded his power in issuing show-cause notice since total amount of CENVAT credit denied was more than Rs.5 lakhs which is the monetary limit imposed as far as the adjudication by the Assistant Commissioner / Deputy Commissioner is concerned. Therefore he submits that it was not proper to deny the CENVAT credit to the appellants. He also submits that in the absence of any verification of correctness of CENVAT credit availed required as per the provisions of notification, action taken by the Assistant Commissioner to deny the rebate on the ground of inadmissibility of CENVAT credit by incorporating the same in the show-cause notice was also not proper. I find that these submissions are correct. The proper course to adopt was to hold up the rebate claim, issue a show-cause notice proposing to deny the CENVAT credit and that has to be a separate proceedings since the total amount proposed to be denied was in excess of the adjudication powers of the concerned authority. If it was within the power of concerned authority, one could take a view that the Assistant Commissioner did not exceed his powers in compiling the show-cause notice denying the CENVAT credit while considering the rebate claim. Therefore the action by the Assistant Commissioner cannot be sustained. Nevertheless I also find that it cannot be said that these services have no nexus. It was submitted that the hotel bills related to the training of the employees which is definitely an input service covered in the definition. As regards air travel, there are several decisions taking a stand that service tax credit in respect of air travel of the employees for the business purpose is admissible as credit. As regards employees insurance, Honble High Court of Karnataka in the case of CCE Vs. Stanzen Toyotetsu Ltd. [2011(23) STR 444 Kar.] has held that credit is admissible. Further repair of vehicles also cannot be said to be unrelated to the output service. Therefore on merit also, I find that the CENVAT credit cannot be said to be inadmissible and therefore the benefit has to be given to the appellants.
3. Further it was also submitted that exercise of correctness of CENVAT credit availed was not at all required as regards the provisions of Notification No.11/2005-ST. What is required to be verified while sanctioning rebate claim under Notification No.11/2005 is whether service has been exported or not and whether consideration has been received for the exported service and whether the tax has been paid on the service exported or not. Other than this, no other verification is required. Therefore on this ground also, the impugned order cannot be sustained. In view of the above discussion, appeals filed by the appellants are allowed with consequential relief, if any, to the appellants.
(Order pronounced and dictated in open court) B.S.V.MURTHY TECHNICAL MEMBER Raja.
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