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Judgment
Appellants have filed these 16 appeals against various impugned Order-in-Appeal Nos. 445 to 450/2020; No.451 to 454/2020 and No.455 to 460/2020 all dated 27/11/2020 passed by the Commissioner (A) whereby the Commissioner (A) has rejected the refund claims of the appellant on certain input services and has upheld the orders of the original authority.
Since the disputed services involved in all these 16 appeals are on identical grounds, therefore, all the appeals are taken up together for discussion and disposal.
Briefly the facts of the present case are that the appellant is engaged in the export of Call Centre services (Business Auxiliary Service) besides domestic supply of renting of immovable property service. Appellants are STPI units located in Bangalore and Hyderabad and they have availed CENVAT credit of service tax paid on various input services in respect of STPI unit and used the same in the export of services and rendering of taxable services in India. CENVAT credit availed after setting off against the output service tax liability arising on domestic services and thereafter claimed as refund under Rule 5 of CENVAT Credit Rules, 2004. The appeal-wise details of input services for which refund has been denied are as under:
TABLE - 1: Details of input services on which refund has been denied
Servi ce Tax Appe al No. of 2021
Claim Period
Busine ss Auxiliar y Service
Cable Operat or Service
commercial Training or Coaching Service
Conv ention Servi ce
Design Service
Event Manag ement Service
Health & Fitness Service
Information Technology Service
Life Insuranc e Service
Mandap keeper / Restaura nt Service
Maintenan ce and Repair Services
Renting of Immovab le Property Service
Sponsorship Service
Tour Operat or Service
Works Contract Service
TOTAL
20211 /2021
Oct - Dec 2010
204
92,683
6,693
33,616
36,760
1,69,956
20212 /2021
Apr - Jun 2010
204
4,094
10,663
13,80,525
13,95,486
20213 /2021
Jan - Mar 2014
61,800
1,18,860
26,049
8,169
4,60,927
6,75,805
20214 /2021
Jul - Sep 2010
204
1,12,728
6,693
1,19,625
20215 /2021
Jan - Mar 2010
204
4,338
6,97,578
1,54,656
1,506
8,58,282
20216 /2021
Oct - Dec 2009
204
4,120
1,461
54,673
60,458
20217 /2021
Apr - Jun 2016
2,940
57,152
60,092
20218 /2021
Oct - Dec 2016
15,224
1,02,681
2,22,439
29,000
3,69,344
20219 /2021
Oct - Dec 2015
11,172
27,932
39,104
20220 /2021
Jul - Sep 2016
10,500
18,705
77,409
1,06,614
20221 /2021
Jan - Mar 2015
2,35,31 3
21,068
2,56,381
20222 /2021
Jul - Sep 2014
90,968
3,43,080
4,34,048
20223 /2021
Oct - Dec 2014
3,57,494
2,01,529
7,009
5,66,032
20224 /2021
Apr - Jun 2014
1,15,538
8,542
24,839
1,48,919
20225 /2021
Oct - Dec 2013
1,26,272
14,980
1,41,252
20226 /2021
Apr - Jun 2015
1,13,269
10,824
4,744
1,28,837
TOTAL
39,836
1,020
18,705
4,120
6,1800
14,75,699
24,049
80,772
14,14,141
6,65,736
6,97,578
1,54,656
29,000
1,506
8,61,667
55,30,235
TABLE - 2: Details of input services for which refund is not pressed due to meagre amount
Claim Period
CESTAT Appeal No.ST/
Broadcasting Service
Management or Business Consultant Service
Manpower Recruitment Service
Outdoor Catering Service
Telecom Service
Oct - Dec 2009
20216 /2021
1,331
Jul - Sep 2010
20214/2021
6,954
Jan - Mar 2014
20213/2021
3,148
2,364
2,237
Oct - Dec 2016
20218/2021
2,806
Oct - Dec 2013
20225/2021
1,398
Jul - Sep 2014
20222/2021
4,508
Apr - Jun 2015
20226/2021
9,613
TOTAL
6,954
3,148
2,364
20,562
1,331
Heard both the parties and perused the records.
Learned counsel for the appellant submitted that the impugned orders rejecting the refund claims of the appellant are not sustainable in law as the same has been passed without properly appreciating the facts and the law and the binding precedent decisions on identical issues. He further submitted that in the impugned order, the Commissioner (A) has disallowed the refund on the input services primarily on the ground that these input services do not have any nexus with the output services and they are not essential service and the absence of which does not adversely impact the quality and efficiency of the output services exported by relying on Circular No.120/01/2010-ST dated 19.1.2010. He further submitted that these services have been held to be input services by various decisions of the Tribunal and the High Court but the same has not been considered by both the authorities. He further submitted that as far as Business Auxiliary Services is concerned, under these services CENVAT credit of service tax paid on the input services availed relates to maintenance of indoor plants in the premises for maintaining clean environment, which is essential for the business and hence, it has a nexus to output services. In support of these submissions, he relied upon the following for each of the services.
GARDEN MAINTENANCE - BUSINESS AUXILIARY SERVICE
1
Semco Electrical Pvt. Ltd Vs Commissioner of C. Ex., Pune 2010 (18) S.T.R 177 (Tri. - Mumbai)
2
Commissioner of C. Ex., Bangalore - II Vs Millipore India Pvt. Ltd. - 2012 (26) S.T.R. 514 (KAR.)
3
Commissioner of C. Ex., & S.T., LTU, Chennai Vs Rane TRW Steering Systems Ltd.- 2015 (39) S.T.R. 13 (Mad.)
4
Lifelong Meditech Ltd. Vs Commissioner of C. Ex. & S.T., Gurgaon-II - 2016 (44) S.T.R. 626 (Tri. - Chan.)
5
Toyota Kirloskar Motor Pvt. Ltd. Vs Commr. of C. Ex., LTU, Bangalore - 2016 (46) S.T.R. 69 (Tri. - Bang.)
6
Orient Bell Limited Vs Commissioner of Central Excise, Noida - 2017 (52) S.T.R. 56 (Tri. - All.)
7
WIPRO Ltd. Vs Commissioner of C. Ex., Pondicherry - 2018 (10) G.S.T.L. 172 (Mad.)
CABLE OPERATOR SERVICE
8
Stock Holding Corpn. Of India Ltd. Vs. Commissioner of S.T., Mumbai- 2015 - 39 STR 664 (Tri. Mumbai)
COMMERCIAL TRAINING OR COACHING SERVICE
9
Gareware Polyster Ltd. Vs. Commissioner of C. Excise, Aurangabad - 2012 (26) STR 215 (Tri. Mumbai)
DESIGN SERVICES - (Decisions relating to Advertising relied upon)
10
Agriculture Products Market Committee Vs. C.C.E., Vadodara-II - 2013 (30) S.T.R. 558 (Tri. - Ahmd.)
11
Heartland Bangalore Transcription Ser. (P) Ltd. Vs. C.S.T., Bangalore- 2011 (21) S.T.R. 430 (Tri. - Bang.)
CONVENTION / EVENT MANAGEMENT / MANDAP KEEPER SERVICES
12
Axis Bank Ltd. Vs Commissioner of Service Tax, Mumbai - 2017 (3) G.S.T.L. 427 (Tri. - Mumbai)
13
Oceans Connect India Pvt. Ltd. Vs Commissioner of C. Ex., Pune-III - 2016 (46) S.T.R. 858 (Tri. - Mumbai)
14
Adobe Systems India Pvt. Ltd. Vs Commissioner of C. Ex. & S.I., Noida - 2015 (38) S.T.R. 998 (Tri. - Del.)
15
Dboi Global Services Pvt. Ltd. Vs Commr. of Service Tax, Mumbai - 2017 (48) S.T.R. 157 (Tri. - Mumbai)
16
Commissioner of C. Ex., Delhi & Delhi-III Vs Convergys India Services Pvt. Ltd - 2017 (48) S.T.R. 173 (Tri. - Chan.)
17
Commissioner of C. Ex. & S.T, Noida Vs Samsung India Electronics Pvt. Ltd. - 2017 (52) S.T.R. 497 (Tri. - All.)
18
Yash Technologies Pvt Ltd Vs. Commissioner CGST, Indore - Final Order No.50943 / 2019 dated 23/07/2019
19
Idea Cellular Ltd. Vs. Commissioner of C. Ex., Meerut-I - 2011 (22) S.T.R. 450 (Tri. - Del.)
20
Trimble Information Technologies India Pvt. Ltd. Vs Commissioner of GST & Central Excise, Chennai - Final Order Nos. 41464-41466 / 2021
21
Delphi Automotive Systems P. Ltd. Vs Commissioner of Customs C.E. & S.T., Noida - 2014 (36) S.T.R. 1089 (Tri. - Del.)
HEALTH AND FITNESS SERVICE
22
Commissioner of S.T., Chennai Vs. Ford Business Services Centre Pvt. Ltd. - 2015 - 38 STR 700 (Tri. Chennai.)
23
Dboi Global Services Pvt. Ltd. Vs Commr. of Service Tax, Mumbai - 2017 (48) S.T.R. 157 (Tri. - Mumbai) affirmed by Hon'ble Bombay H.C in 2019 (20) G.S.T.L. 351 (Bom.)
24
Commissioner of Central Excise Vs. HCL Technologies - 2015 - 37 STR 716 (HC- All.)
RENTING OF IMMOVABLE PROPERTY - CAR PARKING AREA
25
KPMG Vs. CCE, New Delhi (2014 (33) STR 96 (Tri.Delhi)
SPONSORSHIP SERVICE
26
HCL Technologies Ltd. Vs Commissioner of Central Excise, Noida - 2015 (40) S.T.R. 369 (Tri. - Del.).
TOUR OPERATOR SERVICE
27
CAD MACH Machinery Co. (P) Ltd.Vs. Commissioner of Central Excise, Ahmedabad - 2013 (31) STR 333 (Tri. Ahmd.)
WORKS CONTRACT SERVICE (decisions relating to Repairs and Maintenance relied upon)
28
General Manager, B.S.N.L. Vs Commissioner of C. Ex., Raipur - 2015 (39) S.T.R. 278 (Tri. - Del.)
5.1 Further, he submitted that Rule 5 of CENVAT credit Rules, 2004 clearly provides that the appellant can claim refund of unutilized CENVAT credit and at the time of refund, eligibility of the credit cannot be questioned. In support of this, he relied upon the decision in the case of K Line Ship Management India Pvt. Ltd. vs. CST: 2017-TIOL-2406-CESTAT-MUM. He also submitted that the department had not questioned the input services and its utilization for rendering the output services. Learned counsel relied upon the decisions where the Tribunal has consistently held that refund cannot be denied on account of lack of nexus. For this, he relied upon the following decisions:
Verisign Services India Pvt. Ltd. Vs Commissioner of S.T., Bangalore-I - 2018 (12) G.S.T.L. 161 (Tri. - Bang.)
Fractal Analytics Pvt Ltd Vs Commissioner of CGST, Mumbai East - CESTAT Final Order dated 26/08/2019 in Appeal No. ST/88835/2018
Gemini Software Solutions Pvt Ltd Vs CCE, Trivandrum - CESTAT Final Order No. 20001/2020 dated 02/01/2020
Virtusa (India) Pvt Ltd Vs Commissioner of Central Excise, Customs & Service Tax, Hyderabad - II - CESTAT Final Order No. A/30588/2020 dated 24/02/2020
Convergys India Services Pvt. Ltd. Vs. CCE & ST- Gurgaon-I - CESTAT Final Order No. A/60416/2020 dated 08/12/2020
LRN Technology and Content Solutions India Pvt. Ltd. vs. Commissioner (Appeals-II) of CGST & Central Excise, Mumbai - CESTAT Final Order No. A/85832-85833 / 2020 dated 03/01/2020
24/7 Customer Pvt. Ltd. (Appellants own case) - CESTAT, Bangalore Bench - Final Order Nos 20062 - 20063 of 2021
Money Gram India Pvt Ltd Vs. Commissioner of CGST & C. Excise, Mumbai. - CESTAT Final Order No. A/87426/2019 dated 19/11/2019
5.2 The learned counsel also submitted that in view of the clarification given by the Tax Research Unit (TRU) of CBEC vide their letter D.O.F. No.334/1/2012-TRU dated 16.3.2012 effective from 1.4.2012 the amended Rule 5 of the CENVAT Credit Rules, 2004 does not require the correlation between the output service exported and the input services used in such output services exported. For this, he relied upon the following decisions:
K Line Ship Management India Pvt. Ltd Vs C.C.G.S.T., Mumbai West - CESTAT Final Order No. A/88016-88034/2018 dated 26/09/2018
Genpact India Pvt Ltd Vs. Commissioner of CGST, Gurugram - CESTAT Final Order No. 60550 / 2019 dated 16/05/2019
MSCI Services Pvt Ltd Vs. Commissioner of CGST, Mumbai East - CESTAT Final Order No. A/87022-87030/2018 dated 01/08/2018
Siemens Technology and Services Pvt. Ltd. Vs Commissioner of CGST, Mumbai Central - CESTAT Final Order No. A 87465-87468/2019 dated 30/08/2019
Larsen & Toubro Infotech Ltd. Vs Commissioner of CGST, Mumbai East - CESTAT Final Order No. A 87490-87491/2019 dated 18/11/2019
Extracts from CBEC letter D. O. F. No 334/1/2012-TRU dated 16th March, 2012
On the other hand, the learned AR reiterated the findings in the impugned order.
After considering the submissions of both the parties and perusal of the material on record as well as various decisions relied upon by the appellant cited supra, I find that the appellant has given detailed justification in their ground of appeals for each of the impugned services involved in these sixteen appeals with judicial precedents and the impugned services have been used by the appellant for rendering the output services. Further, I find that the reasoning given by the Commissioner(A) in the impugned orders is not correct in law and the correct position in law is that to test for eligibility is whether input services is used by the provider of taxable service for providing output service and the input services should not be covered by the exclusion clause. Further, I find that all these services on which refund has been rejected consistently held to be input services in various decision relied upon by the appellant cited supra. Moreover, the Department has not questioned the input service at the time when the CENVAT credit was taken and as per the decision of this Tribunal in the case of K Line Ship Management Pvt. Ltd. vs. CGST cited supra wherein it has been held that the department is not permitted to question the eligibility of CENVAT credit at the time of claiming refund. Further, in view of the clarification given by the tax research unit of CBEC vide their letter dated 16.3.2012, the amended Rule 5 of CENVAT Credit Rules, does not require correlation between the output service exported and the input service used in such output service exported. This has also been held in various decisions by the Tribunal cited supra. Therefore, by following the ratio of the various decisions cited supra, I allow all the appeals of the appellants and hold that the appellant is entitled to refund of CENVAT credit along with interest in view of the apex court decision in the case of Ranbaxy Laboratories Ltd. vs. UOI: 2012 (27) STR 193 (SC) cited supra along with many other decisions rendered by the Tribunal, except to the extent of the amounts shown in Table - 2 wherein the learned counsel has not pressed for claim of refund on account of small amount involved. Therefore, except Table - 2, appellant is entitled to refund claimed by him. The original authority will re-quantify the amount of refund after deducting the amount not pressed for as stated in Table - 2.
Appeals are, accordingly, disposed of on above terms.
(Order was pronounced in Open Court on 18/08/2021.)