Custom, Excise & Service Tax Tribunal
M/S.Cararo Technologies India Pvt. Ltd vs Commissioner Of Central Excise, ... on 8 December, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. ST/53/2012-MUM (Arising out of Order-in-Appeal No. PIII/RS/303/2011 dt. 25/10/2011 passed by the Commissioner of Central Excise (Appeals) Pune-III ) For approval and signature: Honble Mr. Anil Choudhary, Member (Judicial) ============================================================
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?
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M/s.Cararo Technologies India Pvt. Ltd.
:
Appellant
VS
Commissioner of Central Excise, Pune-III
:
Respondent
Appearance
Mrs. M.S.Rangnekar, C.A. for Appellant
Shri B.K. Iyer, Superintendent (A.R) for respondent
CORAM:
Mr. Anil Choudhary, Member (Judicial)
Date of hearing : 8/12/2014
Date of decision : 8/12/2014
ORDER NO.
The appellant Carraro Technologies (I) Pvt. Ltd. is a provider of service under the classification Design services falling under the provisions of Section 65(105) of the Finance Act and it exports 100% of its services as such, there is an accumulation of Cenvat Credit availed on inputs, input services & capital goods. The appellant therefore have not been on a position to utilize the Cenvat Credit. The appellant have preferred a refund claim of Rs. 4,52,084/- for the period April 2010 to June 2010. The Deputy Commissioner adjudicating authority, observed that for the period under consideration export of output service is valued at Rs.1,04,37,943/- excluding service tax. For the accumulated unutilized Cenvat Credit appellant is to get refund in terms of Rule 5 of Cenvat Credit Rules 2004, read with Notification No. 5/2006-CE. It was further noticed that the appellant have taken Cenvat Credit of Rs.3,73,289/- during the period as per return in Form S.T.3. Further, the adjudicating authority found that, with respect to services availed from Lovelock & Lewes and Pricewaterhouse Coopers Pvt. Ltd. which provided the services of audit and opinion under the statute, was found to be ineligible for an amount of Rs.96,075/- for the reason that, the address on the invoices is of MIDC, Ranjangoan, Pune, whereas, the registered office and business premises of the appellant is situated at Vimannagar, Pune. Thereafter, the adjudicating authority by applying formula, of Cenvat Credit X Export Turnover divided by Total Turnover arrived at the entitlement amount of Rs.3,73,289/-. That is claim Rs. 4,52,084 (-) prior period b/f credit Rs. 78,795/- = Cr-as per S.T.-3 Return Rs. 3,73,289 (-) For Invoices with wrong address of Ranjangaon Rs. 96,076 = Claim Allowed Rs.2,77,213/-.Being aggrieved with the amount of refund rejected (Rs.96,076 + 78,795) or Rs. 1,74,871/-the appellant preferred an appeal before Commissioner (Appeals), who vide the impugned order rejected their appeal holding that the amount of refund cannot exceed the amount of Cenvat credit as per S.T. 3 return and further observed that as the invoice for some services mentioned the Ranjangaon address being, not registered address, the claim is rightly rejected. Being aggrieved, the appellant is in appeal before this Tribunal.
2. The appellant, draws my attention to Circular No. DOF No. 334/1/2010-TRU dt. 26.2.2010 wherein the Board appreciating the difficulties of exporters of services in getting refund under Rule 5 of Cenvat Credit Rules read with notification No. 5/2006 provided for substitution with retrospective effect from 14.3.2006. It have been observed as under:
To give legal backing to the above said circular, leading to faster and fair settlement of the refund claims, changes have been effected in Notification No. 5/2006-C.E. (N.T.). Some of the changes have been made retrospective so that the pending cases are also covered. Other changes are being brought in prospectively, and are aimed at assisting the departmental officers in faster processing of refund claims. The retrospective amendments are contained in clause 73 of the Finance Bill, 2010 while the prospective changes are contained in Notification No. 7/2010-Central Excise (Non Tariff), dated 27th February,2010. Both these documents may be carefully read together for appreciating the full impact of the changes. The salient features of these changes are as follows:-
Retrospective changes effected from 14.3.2006 (i.e.from the date of issue of Notification) (1) The words in relation to have been added in main condition (a) of the Notification.
(2) The word in contained in main condition (b) of the said Notification has been replaced with for.
The above two changes ensure that the provisions of the refund notification and the CENVAT Credit Rules are aligned and that refund is granted on all goods or services on which CENVAT can be claimed by the exporter of goods or services.
(3)The illustration given in condition 5 of the Appendix to the Notification has been deleted. This ensures that refund of CENVAT credit which has been availed in the period prior to the quarter/period for which the refund has been claimed is also eligible for refund. The refund claims should be calculated only on the basis of the ratio of the export turnover to the total turnover of the claimant. Thus, if the CENVAT credit available to the exporter at the end of the quarter, or month, as the case may be, is Rs.1 crore, and the ratio of export to total turnover during the quarter is 50 per cent, then Rs.50 lakhs should be refunded to the exporter. The essence of the changes is that refund shall be available for all goods, or input services, on which CENVAT is permissible and should be processed accordingly. Further, refund of CENVAT should not be linked to CENVAT taken in a particular period only.
Further, the appellant produced copy of amended certificate Centralized of Registration (Form ST-2) dt. 3.8.2013, wherein, both address of the appellants premises of Viman Nagar, Pune as well as additional the office at Ranjangaon Pune, have been recognized by the department. Further, the appellant contended that on plain reading of the Circular dt. 26.2.2010, the appellant is entitled to take refund for the amount rejected for last question in respect of professional services for want of proper address which the appellant again have claimed herein, in the present period and thus prays for allowing the appeal. Even otherwise also, the address at Ranjangaon, Pune was of Group Co., under the same management.
2. The Ld. DR relying on the impugned order prays for dismissal of the appeal.
3. Having considered the rival contention, I find that the address at Ranjangaon whether professional bills were addressed, is the address of the group company which was subsequently recognized as registered office of the appellant by Revenue. In this view of the matter, I hold that the appellant is entitled to refund, on the following Cenvat Credit reproduced below:
Invoice No. Invoice Date Particulars Amount (Inc. of ST) Service Tax PUN30495011 19/03/2010 Lovelock & Lewes 83,552 7,802 PUN29495020 30/09/2009 Lovelock & Lewes 447,899 41,825 PUN29495021 30/09/2009 Lovelock & Lewes 165,450 15,450 PUN29886351 30/10/2009 Price Waterhouse Coopers 276,801 25,848 DEL29895095 26/11/2009 Price Waterhouse Coopers 55,150 5,150 Total 10,28,852/- 96,075 I further hold that the refund of Cenvat Credit cannot be restricted to the amount of credit availed during the period, as per the service tax return because, it is a case of continuous business activity under business entity concept. The appellant is entitled to avail refund under the spirit of Rule 5 of CCR read with notification No. 5/2006 (as amended) read with clarification Circular dt. 26.2.2010 (supra). Thus the appellant is also entitled to refund of Rs.78,795/-, rejected on account of non-inclusion in service tax return for the period. Thus, the appeal is allowed and the impugned order is set aside so far as it relates to rejection of refund. I further, direct the adjudicating authority to issue the balance refund after verifying the arithmetical accuracy, within a period of 45 days from the date of receipt of a copy of this order. The appellant will be entitled to interest on refund as per Rules.
4. Thus, the appeal is allowed.
(Pronounced & Dictated in court) (Anil Choudhary) Member (Judicial) Sm ??
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