Custom, Excise & Service Tax Tribunal
E I Du Pont India Private Limited vs Dy Commissioner Of Central Excise, ... on 16 January, 2018
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH REGIONAL BENCH AT HYDERABAD BENCH - SM COURT - I Appeal(s) Involved: ST/30980/2017-SM (Arising out of Order-in-Appeal No. HYD-EXCUS-004-APP-0075-17-18-ST dated 29/05/2017 passed by COMMISSIONER OF CENTRAL TAX - RANGAREDDY, RANGAREDDY - G S T ) E I Du Pont India Private Limited Appellant(s) Versus Dy Commissioner of Central Excise, Customs & Service Tax, Division-1, Hyderabad-IV Commisisonerate Respondent(s) Appearance: Mr Sandeep Bansal, Rep for the Appellant. Mr Dass A.R. for the Respondent. CORAM: HON'BLE Mr. M.V.RAVINDRAN, MEMBER (JUDICIAL) Date of Hearing: 16/01/2018 Date of Decision: 16/01/2018 Final Order No. A/ 30001 / 2018 [Order per: M.V.RAVINDRAN. ] .
This appeal is directed against Order-in-appeal No. HYD-EXCUS-004-APP-0075-17-18-ST dated 29.05.2017.
2. Heard both sides and perused the records.
3. On perusal of records it transpires that the issue is regarding rejection of refund claim of approximately Rs 1,69,999/-
4. The appellant herein has claimed refund of service tax paid by the service provider. The appellant is an exporter of services. The appellant had claimed the refund of an amount of approximately Rs 65,000/- of the service tax paid for the services rendered by various service providers in respect of garden maintained by them in their research and development area on the reasoning that the Pollution Control Board has mandated for requirement of maintaining a proper green belt. It is the case of the appellant as regards the balance amount of approximately Rs 1,05,000/- that the service tax is discharged by them on the services rendered by the service provider for erecting the barbed wire fences around the field where they were supposed to conduct trials of various hybrid seeds on such field taken on lease from National Dairy Research Institute, Karnal.
5. Learned Departmental Representative takes me through the Pollution Control Board permission granted to them for the R&D Centre, and submits that there is a mandate of maintaining 33% of the area under green belt without which the permission would be withdrawn. It is his submission that in order to maintain such a green area they had availed the services of expert for the garden and the service providers had discharged the service tax liability under gardening services which they have availed as credit and claimed the refund. It is his submission that the issue is now covered by the decision of the Tribunal in the case of Nhava Sheva Intl. Container Terminal (P). Ltd. versus CCE Raigad [2017(3)GSTL 509 (Tri Mumbai).
5.1 As regards the refund of approximately Rs 1,05,000/- it is his submission that in order to conduct field trials which is mandated as per the law of the law, they had taken the land on lease from National Diary Research Institute. He would take me through the research and development services agreement entered by them with various other clients and one of them is Pioneer Overseas Corporation to emphasise the point that they had undertaken these research and development services in respect of various transgenic events, trait/technology evaluation of the seeds which are being developed in order to arrive at a conclusion and as mandated by laws they had to conduct trials on field, which was taken on lease and the said filed is fenced by the service provider and the service tax has been discharged. It is his submission that this service tax is availed as CENVAT credit and refund has been sought as it is used for rendering services which are exported.
6. Learned A.R. on the other hand submits, that in respect of gardening services, the Revenue relies upon the decision of the Tribunal in the case of Stanadyne Amalgamations Pvt Ltd Versus CCE Chennai [2011(268) ELT 86 (Tri-Che) and Kirloskar Oil Engines Ltd Vs CCE Aurangabad [2010 (262)ELT 544 (Tri-Mum)] to submit that gardening services being business expenses, cannot be considered as related to business activity, hence denial of CENVAT credit was correct. As regards the CENVAT credit availed of the service tax paid on fencing of the leased land/field it is the submission that there is no correlation shown by the appellant before the lower authorities and hence the finding of the lower authorities are reiterated.
7. On a careful consideration of the submissions made, I find that as regards the eligibility to avail CENVAT credit and consequent refund of the service tax paid on gardening services, the issue is now settled in favour of the appellant. I perused the permission granted by the Pollution control Board to appellant and note that there is no clause which requires the appellant to maintain a green belt of approximately 33% of the area for which they have sought permission for construction of Research and Development facility. I find that the judgement of the Tribunal in the case of Nhava Sheva Intl. Container Terminal (P). Ltd. (supra) would cover the issue in favour of appellant. In my view, the 1st Appellate authority was in error in rejecting the refund claim of approximately Rs 65,000/-. The impugned order to that extent is set aside and the appeal stands allowed. As regards the service tax liability discharged by the service provider for fencing of the land leased out by the appellant, I find that the lower authorities were correct in coming to a conclusion that these services which were rendered by the service providers could not be correlated with the export of services of the appellant. Before the Tribunal also they are unable to correlate the said services rendered with export services from the appellants premises. To that extent, I find that both the lower authorities were correct in rejecting the refund claims filed by the appellant.
8. In sum total appeal of the appellant is partly allowed in respect of the refund claim of the service tax paid on gardening services and rejected In respect of the claim for the refund of the service tax paid on fencing services of the land. Appeal is disposed of as indicated hereinabove.
(Order pronounced and dictated in open court) M.V.RAVINDRAN MEMBER (JUDICIAL) Neela Reddy 4