Custom, Excise & Service Tax Tribunal
Morgan Stanley Advantage Services Ltd vs Mumbai Ii on 27 August, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NOs: ST/85274 to 85277, 85344 & 86016 to 86018/2014
APPLICATIONS NOs: ST/MA(Ors.)-96597, 96599 to 96601/2014
[Arising out of Order-in-Appeal No: 438 to 444/BPS/MUM/2013 dated 14/10/2013 passed by the Commissioner of Central Excise & Service Tax (Appeals), Mumbai IV, Mumbai Zone I.]
For approval and signature:
Honble Shri P.R. Chandrasekharan, Member (Technical)
Honble Shri Ramesh Nair, 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
APPEAL NOs: ST/85274 to 85277/2014
Morgan Stanley Advantage Services Ltd.
Appellant
Vs
Commissioner of Service Tax
Mumbai II
Respondent
APPEAL NOs: ST/85344, 86016 to 86018/2014 Commissioner of Service Tax Mumbai II Appellant Vs Morgan Stanley Advantage Services Ltd.
Respondent Appearance:
Shri Prasad Pranjape, Advocate for the assessee Dr. B.S. Meena, Additional Commissioner (AR) for Revenue CORAM:
Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Ramesh Nair, Member (Judicial) Date of hearing: 27/08/2014 Date of decision: 27/08/2014 ORDER NO: ____________________________ Per: P.R. Chandrasekharan:
There are 4 appeals filed by the appellant M/s. Morgan Stanley Advantage Services Ltd. against rejection of the refund claims amounting to ? 1,02,94,985/- for the period December 2007 to September 2008 and four appeals filed by Revenue against sanctioning of refund claims amounting to ? 3,01,62,781/- for the period November 2007 to March 2009. The details of the appeals filed and the orders against which they are filed, the period involved, the amount of refund involved are given in the table below: Sl No. Appeal No. Order-in-Appeal No. Period of Refund Claim Amount (`) 1 ST/85276/2014 438 to 444/BPS/MUM/2013 dated 14/10/2013 January 2008 to March 2008 22,08,253/-2
ST/85275/2014 December 2007 25,38,313/-
3ST/85277/2014 April 2008 to June 2008 12,08,128/-
4ST/85278/2014 July 2008 to September 2008 43,40,291/-
5ST/85344/2014 November 2007 75,24,552/-
6ST/86018/2014 October 2008 to December 2008 13,39,242/-
7ST/86017/2014 January 2009 to March 2009 46,18,967/-
8ST/86016/2014 July 2008 to September 2008 1,66,80,020/-
2. The Miscellaneous Applications have been filed for submission of revised FIRCs involved in the impugned orders and since they are relevant to the proceedings for consideration, they are admitted.
3. The learned counsel for the assessee-appellant submits that the refund claims amounting to ? 1.02 crore approximately was rejected by the lower appellate authority only on the ground that the foreign inward remittance certificates (FIRCs) produced by the assessee-appellant in respect of seven such certificates, mentioned in para 14 of his order, pertain to remittance against export of goods, whereas the appellant is a provider of service, and therefore, the FIRCs produced and the export undertaken are not matching. The learned counsel has now filed revised FIRCs by way of miscellaneous applications wherein the bank has rectified the mistake and deleted the reference to export of goods in these FIRCs. Therefore, the objection taken in the grant of refund no longer sustains and hence the appellant is eligible for the refund claims.
3.1. In the Revenues appeal, the only ground urged for rejecting the refund claims amounting to ? 3.01 crore is that the Notification No. 5/2006 dated 14/03/2006 in clause (b) of the opening paragraph states that credit shall be allowed in respect of inputs or input service used in providing output service which is exported without payment of tax. The use of the expression in is restrictive and, therefore, the assessee-respondent is not entitled for refund of various input services on which credit has been taken, such as travel agent service, consultancy service, repairs and maintenance services, car rentals, renting of immovable properties, etc. which are used for rendering of output service. The learned counsel for the assessee points out that the said notification has been retrospectively amended vide Section 74 of the Finance Act, 2010 wherein the word in has been substituted by the word for. Therefore, this objection no longer remains. The learned counsel also points out that even prior to the amendment, the CBEC vide circular dated 19/01/2010, had clarified that the exporters would be eligible for refund of the input service credit even if they are used for the export of the services and in the subsequent circular dated 26/02/2010 this position has been further reiterated. Therefore, the ground taken by the Revenue is no longer sustainable and accordingly he pleads for dismissing the Revenues appeals and upholding the refund already sanctioned to the assessee-respondent.
4. We have carefully considered the submissions made by both the sides.
5. As regards the rejection of the refund claim amounting to ` 1.02 crore the objection was mainly in respect of the FIRCs mentioning that the proceeds have been realised in respect of export of goods. Meanwhile, the said certificates have been corrected by the collecting the bank and therefore, this objection would no longer be sustainable. However, the correct certificates were not available before the lower authorities when they rejected the claim and, therefore, the matter is remanded back to the refund sanctioning authority for consideration of the revised FIRCs now obtained by the assessee-appellant from the collecting bank and after considering the same, refund shall be granted to the appellant as per law.
6. As regards the appeals of the Revenue, the only ground urged is on the use of the expression in which has been retrospectively amended by substitution of expression for. The expression for implies for the purposes of as held by the honble apex Court in the case of Indian Chamber of Commerce [AIR 1976 SC 348]. Therefore, if any input service has been used for the purpose of export of output service, refund of input service credit would be available. In any case, the department has not objected to the assessee-respondent taking the credit at the relevant time and the objection has been raised only at the time of filing of the refund claims. This Tribunal, in the case of Commissioner of Service Tax, Delhi vs. Convergys India Pvt. Ltd. 2009 (16) STR 198 (Tri-Del.) had taken the view that there cannot be two yardsticks, one for allowing the input credit and another for refund of the credit taken. The Tribunal observed in the said case that there cannot be two different yardsticks: one for permitting the credit and the other eligibility for granting credit. Whatever credit has been permitted to be taken, the same are permitted to be utilized and it is not possible to have two provisions, one for grant of refund or as rebate. Without questioning the credit taken, the eligibility to refund cannot be questioned. The above ratio squarely applies to the facts of the present case. On this ground also the appeals filed by the Revenue fails and sanction of refund to the assessee-respondent cannot be disputed.
7. Thus, the appeals filed by the assessee M/s. Morgan Stanley Advantage Services Ltd. are allowed by way of remand and the appeals filed by the Revenue are dismissed as devoid of merits. The miscellaneous applications are also disposed of.
8. Since the refund amount pertains to the year 2007 and 2008 onwards, the refund sanctioning authority is directed to dispose of the refund claims within a period of one month from the date of receipt of this order.
(Dictated in Court) (Ramesh Nair) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) */as 7