Custom, Excise & Service Tax Tribunal
Mr. M. M. Ravi Rajendran, Dr For The vs Mr. B. G. Chdanand, Advocate For The on 7 September, 2011
IN THE ,CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, FKCCI COMPLEX, K.G. ROAD,
BANGALORE 56009.
DATE OF HEARING : 7/9/2011
DATE OF DECISION : 7/9/2011
Stay application Nos. 1511 to 1513/2010
Service Tax Appeal No. 2513 to 2515 of 2010
(Arising out of the Order-in-Appeal No. 166 to 168/2010 dated 5.4.2010, passed by the Commissioner of Central Excise (Appeals-II), Bangalore)
For approval and signature:
Honble Shri P. G. Chacko, Member (Judicial)
Honble Shri M. Veeraiyan, Member (Technical)
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not ? Yes
3. Whether Their Lordships wish to see the fair copy of the Order? Seen
4. Whether Order is to be circulated to the Departmental authorities? Yes
Commissioner of Service Tax,
Bangalore.
Versus
M/s Sterling Commerce Solution
India Pvt. Ltd.
Appellant
Respondent
Appearance Mr. M. M. Ravi Rajendran, DR for the appellant Mr. B. G. Chdanand, Advocate for the Respondent.
CORAM : Honble Shri P. G. Chacko, Member (Judicial) Honble Shri M. Veeraiyan, Member (Technical) ORDER No..Dated 07/9/2010 PER P.G. CHACKO These are stay applications filed by the department (appellant) seeking stay of operation of the impugned order wherein the learned Commissioner (Appeals) granted partial relief to the respondent in relation to three refund applications filed by them. After examining the records and hearing both sides, we are of the view that the appeals also require to be finally disposed of at this stage. Accordingly, after rejecting the stay applications, we proceed to deal with the appeals.
2. The respondent (assessee) had filed three refund claims for the amounts of Rs. 21,62,953/-, Rs. 47,92,926/- and Rs. 52,04,632/-, being the unutilized CENVAT credits taken on input services which were used in providing output service which was exported. By filing these refund claims, the assessee was claiming the benefit of Notification No. 5/2006-CE (N.T.) dated 14.3.2006 issued by the Central Govt. directing refund of such unutilized CENVAT credit subject to certain conditions as limitations. In respect of each refund claim, the Assistant Commissioner issued a show-cause notice directing the claimant to furnish certain documents/records and asking them to show cause why the refund claims should not be rejected on the ground of non-compliance with the conditions attached to the notification. The proposal was contested by the party. In adjudication of each show-cause notice, the Assistant Commissioner granted substantial relief but rejected the claim in relation to some of the services which were claimed to be input services by the party, which were not recognized by the adjudicating authority as input services in the absence of nexus with the output service.
3. Against the adverse portions of the Orders-in-Original, the assessee preferred appeals to the Commissioner (Appeals). The learned Commissioner (Appeals), on his part also, granted partial relief to the party by holding that some of the services which were not recognized as input services by the lower authority were input services essential for rendering the output service. However, in respect of Event Management Service and Club or Association Service, the appellate authority agreed with the lower authority by holding the same to have no nexus with the output service. In so far as the services which were not recognized as input services by the original authority but held to be input services by the appellate authority were concerned, the learned Commissioner (Appeals) directed production of Chartered Accountants Certificates to the lower authority as per the Boards Circular No. 120/01/2010-ST dated 19.1.2010. The relevant part of the appellate Commissioners order is reproduced below :-
5. I have carefully gone through the case records, oral submissions made by the appellant during the personal hearing. The issue involved in all the three appeals is with regard to refund of unutilized Cenvat credit of service tad. On perusal of the three impugned orders, I find that the refund has been rejected on the following services viz., Club or Association Service, Commercial Coaching and Training Service, Event Management Service, Manpower Recruitment Services, Rent a Cab Services, Security Agency Services, Maintenance or Repair Service (Electrical Maintenance and Building Maintenance), House Keeping Services, Management Consultants Service and Renting of Immovable Properties (Car Parking charges), Outdoor catering services, Interior Decorator Services, Scientific & Technical Consultancy Services, Supply of Tangible goods services and Renting of Immovable properties (Car parking charges). I have examined all the above services in the light of Boards Circular No. 120/01/2010-ST dated 19.1.2010 and hold that the all above cited services are essential input services except Event Management Service & Club or Association Service. Accordingly, I pass the following order subject to production of Certificate from the Chartered Accountant on their Declaration on input services as per the Circular dated 19.1.2010.
4. The present appeals filed by the department are directed against what is referred to as remand ordered by the lower appellate authority. The appellant has relied on the Honble Supreme Courts judgment in MIL India Ltd. Vs. Commissioner of C.Ex., Noida [2007 (210) E.L.T. 188 (S.C.)] wherein the apex Court held that, with effect from date on which the Finance Act, 2001 came into force, the appellate Commissioners did not have the power of remand. The learned DR has also relied on the Tribunals decision in the case of Commissioner of C. Ex., Noida Vs. Orient Crafts Ltd. [2011 (21) S.T.R. 302 (Tri.-Del.)] wherein it was held to the same effect in relation to the appellate Commissioners dealing with service tax appeals.
5. The learned Counsel for the respondent submits that the impugned order cannot be said to be an order of remand and therefore, the grounds of the Revenues appeals are not relevant. It is submitted that the purport of the appellate Commissioners order was to ensure compliance with the procedure laid down in the Boards Circular dated 19.1.2010. According to the learned Counsel, this position is evident from the fact that the original authority was given the limited instruction to consider any certificate of Chartered Accountant that might be produced by the party in support of the declarations filed with the refund claims. According to the learned Counsel, this limited instruction to ensure compliance with the procedure cannot be said to be remand of the case. The learned Counsel has also made an endeavour to confer the power of remand on the Commissioner (Appeals) on the strength of CST, Delhi Vs. M/s World Vision [2010-TIOL-290-CESTAT-DEL], a decision rendered by the learned Single Member of the Tribunal.
6. After considering the submissions, we have found a semblance of consensus. The learned appellate Commissioners order was accepted by the party, which means that they are not averse to a direction being issued by the Tribunal to the original authority to ensure compliance with the procedure laid down by the Board. On the part of the appellant (Revenue), the contention is that the learned Commissioner (Appeals) in this case did not have the power of remand. They are not averse to a remand being ordered by this Tribunal for the very same purpose, to the original authority. In this scenario, it is not necessary to examine the nitty-gritty of the question whether the impugned order is a typical remand order or not. It would serve the ends of justice if we send the case to the original authority for the limited purpose of ensuring compliance with the procedure laid down by the Board in Circular dated 19.1.2010, after sustaining the decision taken by the learned Commissioner (Appeals) on merits, which decision is not under challenge
7. Accordingly, we dispose of these appeals with a direction to the original authority to afford an opportunity to the respondent to produce certificates from Chartered Accountant as required in the Boards Circular dated 19.1.2010 ibid and sanction refund in respect of the relevant input services subject to production of the above certificates to its satisfaction. The stay applications also stand disposed of.
(Pronounced and dictated in the open court)
(M. Veeraiyan) (P. G. Chacko)
Member (Technical) Member (Judicial)
/vc/