Custom, Excise & Service Tax Tribunal
Apax Partners India Advisers Private ... vs Mumbai Central on 1 May, 2019
ST/87444 of 2018
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
WEST ZONAL BENCH - MUMBAI
Service Tax Appeal No. 87444 of 2018
Arising out of Order-In-Appeal No. PK/199/MC/2017 dt. 13-10-2017 passed by the
Commissioner of GST & Central Excise (Appeals-II), Mumbai
M/S. APAX PARTNERS INDIA ADVISERS PVT. LTD., ........Appellant
Piramal Towers, 6th Floor,
Peninsula Corporate Park
Ganpatrao Kadam Marg,
Lower Parel (W), Mumbai-400013
VERSUS
Commissioner of C.G.ST.- MUMBAI CENTRAL ...Respondent
4th Floor, C. Ex. Building, Churchgate, Mumbai - 400 020.
APPEARANCE:
Shri Sushanth Mistry, Advocate for the Appellant Shri Sudhir B. Mane, Authorised Representative for the Respondent CORAM: HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL) FINAL ORDER NO. A/85807/2019 DATE OF HEARING: 19-12-2018 DATE OF DECISION: 01-05-2019 Rejection of refund claim on Air Travel Agent services made against CENVAT credit accumulated during export of service is the subject matter of this appeal.
2. Factual backdrop of this case is that appellant has been exporting investment advisory services registered under banking and other finance services. Refund claim was made against unutilized CENVAT credit accumulated during the period January to March 2015 and objection was raised by the department on five such services namely:
ST/87444 of 2018
a) Air Travel Agent service;
b) Real Estate Agent service;
c) Membership Fee service;
d) General Insurance (Employee Insurance) service and
e) Telecommunication services;
out of which adjudicating authority disallowed refund on first three services against which CENVAT credit of ₹ 1,94,134/- was claimed for refund. In The appeal before the Commissioner (Appeals), he allowed membership fee service for availement of CENVAT credit and disallowed CENVAT credit on Air Travel Agent and General Insurance service. The appellant challenged the order of Commissioner (Appeals) concerning refusal or CENVAT credit against Air Travel Agent services only before this Forum.
3. Upon hearing of the Learned Counsel for the respective parties and on perusal of case record, it is observed that the ground of rejection of availment of such CENVAT credit, as stated by the Commissioner (Appeals) were primarily two.
First; Those two services are in the exclusion clause under Rule 2(I) of the CENVAT credit rule vide notification no. 3/2001-SC(LT) dated 1.3.2001. Second; After specific direction of adjudicating authority, appellant had failed to produce any tangible evidence or invoice to prove that the said service had direct nexus with the output service provided by the appellant and they were not used for the personal cause or welfare of employee. On perusal of the defect memo issued by department on dated 3 rd February 2016, it is found that respondent department had sought only original CENVAT credit ledger and original copy of Chartered Accountant's certificate in Anexure-1A and the same was produced by the appellant before the Dy. Commissioner of Service Tax (Refund) on 12 th February 2016 with due acknowledgment. In the said defect memo, inadmissibility ST/87444 of 2018 of CENVAT credit availed against those 5 input services were pointed out in the remark column as not covered under the definition of input service and no nexus with export of services. In the compliance report submitted by appellant by way of compliance, as referred above, it has been clearly mentioned by the appellant that it provided export of services to its clients located in UK and for conducting business operations/meetings/business planning/marketing, top executives of company were required to travel within and out of the country and the fee paid to the travel agent on air tickets for such business travels and accommodation had direct linkage to export of services. Learned Councel for the appellant also had placed his reliance in the Case Laws noted below:
Emcon Technologies India Pvt. Ltd. Vs. CCEx., BBangalore DCW Ltd Vs. CCEx., Tirunelveli Dr. Reddy's Lab. Ltd. Vs. CCEx., Hyderabad Fine care Biosystems Vs. CCEx., Ahmedabad Light Alloy products Vs. CCEx., Chennai Caliber Point Business Solutions Ltd. Vs., CC Heartland Bangalore transcription service (P) Ltd. Vs., CST Goodluck steel Tubes Ltd. Vs. CCE and argued that their exist direct nexus between input service and service exported by the appellant. He also submitted documents of 59 pages containing sample invoices, email communications and requirements of travel for purchase of tickets, arrangements of hotel accommodation and passenger details etc. to establish that those travels were related to the business development as well as requirement of appellant company and not to meet any private purpose. Along with such documents, an application had been submitted by him to take those documents of record as evidence in conformity to Rule 23 of CESTAT procedure rules 1982.
ST/87444 of 2018
4. On perusal of those documents it apparently clear that the travel agent services were availed by appellant for the purpose of providing and exporting services for which it has registered, besides the fact that it had, with its possession all corresponding documents which could have been produced before the adjudicating authority or the Commissioner (Appeals) had the same being called for.
5. Therefore the observation of Commissioner (Appeals) that the appellant could not produce required documents before the adjudicating authority is un- supported by factual reality. Concerning production of certificate, it is found that appellant had produced the required Chartered accountant's certificate in compliance to defect memo. Moreover exclusion clause available in 2(l) of CENVAT Credit Rules clearly mentioned that travel benefits to extend to employees on vacation such as leave or home travel concession are only excluded from the purview of availment of CENVAT credit and services which are used primarily for personal use or consumption of any employee is also excluded. In other words, services which are related to the out put services are not excluded by this definition. Hence the order.
6. The appeal is allowed and the order to pass by the Commissioner (Appeals) in Appeal No. PK/199/MC/2017 dt. 13-10-2017 hereby set aside. Appellant is eligible for CENVAT credit of ₹ 1,79,800/- availed towards travel agent service and eligible to get such refund. Respondent department is directed to release the said refund with applicable interest, within 3 months time.
(Pronounced in court on 01-05-2019) (DR. SUVENDU KUMAR PATI) MEMBER (JUDICIAL) Johnson