Custom, Excise & Service Tax Tribunal
Akamai Technologies India Pvt. Ltd vs Commissioner Of Service Tax Bangalore ... on 19 December, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/20743/2015-SM, ST/20744/2015-SM, ST/20745/2015-SM, ST/20932/2015-SM, ST/20933/2015-SM, ST/20934/2015-SM [Arising out of Order-in-Appeal No. 882-884/2014 dated 30/12/2014 passed by Commissioner of Service Tax , BANGALORE-I( Appeal) ] Akamai Technologies India Pvt. Ltd Salarpuria Softzone, 2-3rd Floor, A Wing, Survey No 80/1, Bellandur Village, Outer Ring Road BANGALORE - 560103 KARNATAKA Appellant(s) Commissioner of Service Tax BANGALORE SERVICE TAX- I 1ST TO 5TH FLOOR, TTMC BUILDING, above BMTC BUS STAND,DOMLUR BANGALORE, - 560071 KARNATAKA Appellant(s) Versus Commissioner of Service Tax BANGALORE SERVICE TAX- I 1ST TO 5TH FLOOR, TTMC BUILDING, above BMTC BUS STAND,DOMLUR BANGALORE, - 560071 KARNATAKA Respondent(s)
Akamai Technologies India Pvt. Ltd Salarpuria Softzone, 2-3rd Floor, A Wing, Survey No 80/1, Bellandur Village, Outer Ring Road BANGALORE - 560103 Karnataka Respondent(s) Appearance:
Shri Harish Bindu Madhavan, Advocate For the appellant Shri Pakshi Rajan, AR For the respondent Date of Hearing: 29/12/2016 Date of Decision: 29/12/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 21527-21532 / 2016 Per : S.S GARG The assessee has filed three appeals against the impugned Order-in-Appeal dated 30.12.2014 passed by the Commissioner of Service Tax (Appeals) whereby the Commissioner (A) has allowed the refund of accumulated CENVAT credit in respect of certain input services and rejected the refund with regard to certain other services. Aggrieved by rejection of refund claim by the learned Commissioner (A) vide impugned order, assessee has come in appeal before this Tribunal. The input services on which refund has been allowed, the Revenue has also filed three appeals challenging the grant of refund with regard to few services. In these six appeals, three appeals are filed by the Revenue and three appeals are filed by the assessee. Since the issue is identical in all these six appeals, therefore they are being disposed of by this common order.
2. Briefly the facts of the case are that the assessee is registered with the software technology park of India and is a 100% Export Oriented Unit (EOU) engaged in the business of rendering Business Auxiliary Services and Information Technology Software Services to Akamai Technology International, USA. In the course of rendering the taxable output service, assessee uses and consumes various input services paying appropriate rate of service tax. The assessee filed refund claims for claiming refund of service tax paid. The details of refund claims are as under:
Appeal No. ST/20743/2015 ST/20744/2015 ST/20745/2015 Period of dispute Oct. 2009 to March 2010 April 2009 to Sep. 2009 Oct. 2010 to March 2011 Refund amount Rs.10,25,314/-
2.1 The Assistant Commissioner rejected the claim on various allegations including the nexus between the input services and the output service. Aggrieved by the said order, the assessee filed three appeals before the Commissioner (A) who vide the impugned order dated 30.12.2014 partially allowed the appeal and allowed the refund with regard to certain services and rejected the refund with regard to certain services mainly on the ground that these services do not affect the quality and efficiency of the export services and secondly the details of usage of input services is not furnished. The following table has been submitted by the learned counsel for the assessee which depicts the services on which the refund has been allowed subject to verification and other services where refund has been denied on account of the fact that the said input services does not affect the quality and efficiency of the provision of service exported.
Input service Allowed/ disallowed Reason Renting of immovable property services (car Parking and Cafeteria) Allowed Subject to verification of cost incidence or of invoices Insurance Auxiliary Services (General Insurance) Outdoor Catering Rent-a-cab Cleaning Activity Services Management, Maintenance or Repair Services (Premises Tour Operator Services Air Travel Agency Clearing and Forwarding Agency Commercial Coaching and Training services Courier Services Management or Business Consultants Security Services Storage & Warehousing Services Advertising Agency Services Custom House Agent Services Manpower Recruitment Services Online Information and Database Access Erection, Commissioning & Installation Services Chartered Accountant Disallowed In the absence of details of eligibility or otherwise is not discussed.
Does not affect the quality and efficiency of the provision of service exported. Interior Decorator Services Pandal and Shamiana Services Sponsorship Services Practicing Company Secretary Event Management Health and Fitness Services Public Relation Service Club or Association Services Real Estate Agency Services
3. Heard both the parties and perused the records.
4. The learned counsel for the assessee submitted that in terms of proviso to Rule 5 of CENVAT Credit Rules (CCR), 2004, the assessee is eligible for refund of unutilized portion of CENVAT credit on export of services and such refund cannot be denied when the availment of CENVAT credit has not been questioned. In support of this, he relied upon the decision in the case of CST vs. Convergys India Pvt. Ltd.: 2009 (16) S.T.R. 198 (Tri.-Del.) wherein it was held that without questioning availment of CENVAT credit, the eligibility of rebate/refund cannot be denied and that there cannot be two different yardsticks one for permitting credit and the other for eligibility for granting refund. He further submitted that CBEC vide its Circular No.120/1/2010-ST dated 19.1.2010 clarified that the condition of nexus should be read legally and in a harmonious manner consistent with the intent to provide refund to exporters, and the said intention was further reflected in the Notification No.5/2006. In support of his submissions, he relied upon the following decisions which cover all the input services on which the refund has been denied. * State of Punjab vs. British India Corporation Ltd.: AIR 1963-SC-1459 * ARM Embedded Technologies Pvt. Ltd. vs. CCE , C & ST: 2016-TIOL-2565-CESTAT-BANG. * IBM India Pvt. Ltd. vs. CCE: 2014-VIL-453-CESTAT-BLR-ST * Accenture Services Pvt. Ltd. vs. CST, Mumbai-II: 2015-VIL-749-CESTAT-MUM-ST * M/s. ITC Ltd. v. CCE: 2016-TIOL-2006-CESTAT-BANG.
* CCE, Delhi-III vs. Maruti Suzuki India Ltd.: CEA No.9 of 2016 decided by the Honble Punjab and Haryana High Court on 21.10.2016. * Idea Cellular Ltd. vs. CCE, Meerut-I: 2011 (22) STR 450 (Tri.-Del.) * Eicher Motors Ltd. vs. CCE, Indore: 2016-TIOL-2375-CESTAT-DEL.
* Reliance Industries Ltd. vs. CCE, Mumbai: 2016-TIOL-2392-CESTAT-MUM.
* Infosys Technologies vs. CCE, Pune-I: 2016-TIOL-2237-CESTAT-MUM * JP Morgan Services India Pvt. Ltd. vs. CST, Mumbai: 2016-TIOL-378-CESTAT-MUM. * CST, Bangalore v. Team Lease Services Pvt. Ltd. : 2014 (36) STR 543 (Kar.) * CST, Delhi v. Convergys India (P) Ltd: 2009 (16) STR 198 (Tri.-Del.) as affirmed by the P & H High Court in 2010 (20) STR 166 (P&H) * CCE, Hyderabad-IV v. Deloitte Tax Service India P. Ltd.: 2008 (11) STR 266 (Tri.-Bang.) as affirmed by the Honble Andhra Pradesh High Court in 2014 (33) STR 129 (AP) * Wills Processing Services (I) Pvt. Ltd. vs. CST, Mumbai-II: 2015 (38) STR 169 (Tri.-Mum) * TCS E-Serve Ltd. vs. UOI: 2015 (321) ELT 564 (Bom.) * CCE & C, Aurangabad v. Endurance Technology Pvt. Ltd.: 2015-TIOL-1371-HC-MUM-ST * CIT vs. Panipat Woollen & General Mills Co. Ltd.: 1976 (103) ITR 66 (SC) * CIT v. Dhanrajgirji Raja Narasingirji [1976] 91 ITR 544 (SC) * State v. Parmeshwaran Subramani: 2009 (242) ELT 162 (SC) * B. Premanand v. Mohan Koikal (2011) 4 SCC 266 * Logic India Trading Co. v. CC, Cohin: 2016 (337) ELT 65 (Tri.-Bang.) * CC & CE, Tirupati v. Panyam Cements & Minerals Industries Ltd.: 2016 (331) ELT 206 (AP) * Manhattan Associates (India) Development Centre Pvt. Ltd. vs. CST, Bangalore: 2016-TIOL-3083-CESTAT-BANG.
5. The Revenue has filed three appeals against the impugned order passed by the Commissioner (A) alleging that the impugned order is not legal and proper to the extent that the assessee has availed CENVAT credit on renting of immovable property services for car parking and cafeteria, outdoor catering, renting of cab, tour operator, cleaning activity services, insurance auxiliary services and management, maintenance and repair services for premises, for providing output services i.e., information technology software services, online information and data services, business auxiliary services and manpower recruitment service. The learned AR submitted that these input services do not affect the quality and efficiency of export services provided by the assessee and further, he submitted that the case laws relied upon by the Commissioner (A) for allowing the refund are under challenge before various High Courts and has not attained finality.
6. I have heard both the sides and perused the materials on record and have gone through the judgments cited by the assessee wherein the CENVAT credit has been allowed in respect of various input services used by the assessee for rendering export services and here it is pertinent to mention that definition of input services as contained in Rule 2(l) of CCR as it existed prior to 1.4.2011. 2(l) input service means any service,-
(i) Used by the provider of taxable service for providing an output service, or
(ii) Used by the manufacture, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal.
And includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisemtn of sales promotion, market research, storage up to the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; 6.1 The Honble Bombay High Court in the case of CCE vs. Ultratech Cement Ltd.: 2010 (260) ELT 369 (Bom.) has observed as under:
29. The expression activities in relation to business in the definition of input service postulates activities which are integrally connected with the business of the assessee. If the activity is not integrally connected with the business of the manufacture of final product, the service would not quality to be an input service under Rule 2(l) of the CCR, 2004.
7. On a careful consideration of the judgments cited above, I am of the considered opinion that the impugned order is not sustainable in law in view of the fact that all the services for which CENVAT credit of service tax has been denied are in fact input services and the assessee is entitled to get refund of CENVAT credit lying unutilized in the CENVAT credit account and therefore, I set aside the impugned order by allowing the assessees appeals subject to verification of the documents by the original authority. Similarly, in view of my discussions above, I do not find any merit in the appeals filed by the Revenue and all the three appeals of the Revenue are hereby dismissed.
(Operative portion of the Order was pronounced in Open Court on 29/12/2016.) S.S GARG JUDICIAL MEMBER rv 9