Custom, Excise & Service Tax Tribunal
Ptc Software (India) Pvt. Ltd vs Pune Iii on 6 March, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NOS: ST/543 & 689/2012
[Arising out of Order-in- Appeal No: PIII/RS/151 & 152/2012 dated 30/04/2012 passed by the Commissioner of Central Excise, Pune III.]
For approval and signature:
Honble Shri P.R. Chandrasekharan, Member (Technical)
Honble Shri 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?
:
No
2.
Whether it should be released under Rule 27 of 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
PTC Software (India) Pvt. Ltd.
Appellant
Vs
Commissioner of Central Excise
Pune III
Respondent
Appearance:
Shri Bharat Raichandani, Advocate for the appellant Shri D.D. Joshi, Superintendent (AR) for the respondent CORAM:
Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) Date of hearing: 06/03/2013 Date of decision: 06/03/2013 ORDER NO: ____________________________ Per: P.R. Chandrasekharan:
There are two appeals arising out of a common Order-in-Appeal No: PIII/RS/151 & 152/2012 dated 30/04/2012 passed by the Commissioner of Central Excise, Pune III.
2. The appellant, M/s. PTC Software (India) Pvt. Ltd. are engaged in providing Information Technology Software Services and Business Support Services. They export most of the services and claim refund of the service tax paid on input services under Rule 5 of the CENVAT Credit Rules, 2004. The appellant filed refund claims for ` 57,48,950/- and for ` 45,05,861/- on 29/09/2011 on the ground that they had exported the taxable output services and since they are continuously engaged in exports, they are not in a position to utilise the CENVAT credit taken on input services used in providing the output services exported. The original authority rejected an amount of ` 10,72,373/- in respect of the first refund claim and an amount of ` 1,08,188/- in respect of the second refund claim. Against the rejection, the appellant preferred an appeal before the lower appellate authority who dismissed the appeal. Hence, the appellant is before us.
3. The learned counsel for the appellant made the following submissions:
3.1. The ground for rejection by the department are as follows:
(i) Insurance services were provided not to the employees but to the family members;
(ii) Service tax paid on car parking services are not considered as input services for the output services provided;
(iii) Claims not supported by input service invoices;
(iv) Provider of taxable service were not registered with the department as service tax assessees.
3.2. With regard to the above ground of rejections, they contend as follows:
3.2.1. As regards the insurance premium paid for members of the family of the employees and the service tax paid thereon, the policy is a group insurance which is a perquisite given to the employees as part of their employment. The premium paid for the group insurance is the same whether it is for the employee or for the family members, under the group insurance scheme. The Tribunal in the case of Stanzen Toyotetsu India Pvt. Ltd. vs. Commissioner of Central Excise, Bangalore III 2009 (14) STR 316 (Tri.-Bang.) has held that service tax paid on group insurance health policy is an eligible input service and credit would be available under the CENVAT Credit Rules. The said decision of the Tribunal has also been upheld by the honble High Court of Karnataka in the same case reported in 2011 (23) STR 444 (Kar.). The case of group insurance is also part of the cost of rendering the service under the accounting standards as per CAS-4 and, therefore, the appellant is entitled for availing the credit of service tax paid on group insurance premium even if the policy covers members of the family of the employees. The said decision was also followed by the honble Karnataka High Court in the case of Commissioner of Central Excise & Service Tax vs. Micro Labs Ltd. 2012 (26) STR 383 (Kar.) wherein it was held that group insurance health policy, though a welfare measure, is an obligation cast under the statute that the employer has to obey and, therefore, the policy taken by the employer is a service constituting activity relating to business which is covered under the input service definition.
3.2.2. Regarding the denial of service tax credit on service tax paid on rental for car parking, the learned counsel submits that the appellant has rented out premises for their office purposes and along with office premises, car parking space was also rented out so that the employees could park their cars. This is part of their office expenses and, therefore, is an eligible input service.
3.2.3. As regards the rejection on account of non-production of input service invoices, he submits that, they have the requisite invoices and they are willing to submit the same to the jurisdictional authorities and their eligibility to the claim can be verified.
4. The learned Superintendent (AR) appearing for the Revenue reiterates the findings of the lower authorities.
5. We have carefully considered the submissions made by both the sides.
5.1. As regards the rejection of refund pertaining to service tax paid on group insurance policy, which also includes members of the family of the employee, the issue has already been settled in favour of the appellant in the cases of Micro Labs Ltd. and Stanzen Toyotetsu India (P) Ltd., cited supra decided by the honble High Court of Karnataka. Therefore, the appellant is rightly entitled to take credit of service tax paid on insurance premium on group insurance policy as the said service is an eligible input service and we hold accordingly.
5.2. Similarly, as regards the service tax paid on car parking rentals, the car parking is part of the business premises of the appellant and is a business expenditure. Therefore, it is an eligible input service as defined in Rule 2(l) of the CENVAT Credit Rules, 2004. The honble High Court of Bombay in the case of Ultratech Cement Ltd. held that any input service which has a nexus with the business of manufacture or relating to business would get covered under the term input service under Rule 2(l) of the CENVT Credit Rules and accordingly CENVAT credit on such services would be available. In view of the above we are of the considered view that service tax paid on car parking rentals is an eligible input service under Rule 2(l) of the CENVAT Credit Rules and consequently the appellant would be eligible for refund of the same under Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. 5/2006-SDT dated 14/03/2006.
5.3. As regards the credit relating to services for which the input invoices were not produced, the appellant is directed to submit the same before the adjudicating authority to consider their eligibility to the credit and the consequential refund in accordance with law.
6. In view of the above, the matter has to go back to the adjudicating authority for consideration of the claim of the appellant afresh. Thus the appeals are allowed by way of remand.
(Operative part Pronounced in Court) (Anil Choudhary) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) */as 7