2011 (2) TMI 929 - AT - Service Tax

Condition of pre-deposit of duty and penalty - period 2006 2008 - Recipient of various services from their parent Company situated in USA - the appellant is a STPI (Software Technology Park of India), registered unit and are exporting services. They are availing credit on service tax being paid by them and as they are not in a position to avail the said credit and are exporting services, such credit is being refunded to them in cash, in terms of the provisions of Rule 5 of the Cenvat Credit Rules. The appellant s contention is that the service tax now being confirmed against them was also available as modvat credit to them and they were in a position to claim the refund of the same - As such, the entire situation is Revenue neutral - Accordingly, impugned order is set aside and matter is remanded to Commissioner for consideration the plea having been raised by the appellant.

Summary

Issues:
1. Confirmation of service tax against the appellant for the period 2006-2008.
2. Appellant's contention of being a STPI unit and exporting services, thus eligible for refund of modvat credit.
3. Request for remand to the Commissioner to decide on the plea raised by the appellant.

Analysis:
1. The Appellate Tribunal confirmed the service tax against the appellant for the period 2006-2008, as they received various services from their parent company in the USA. The advocate agreed that post 18.04.2006, the appellant is liable for service tax but disputed the demand on multiple grounds.

2. The appellant, being a STPI registered unit exporting services, claimed they were entitled to avail credit on service tax paid by them. They argued that as they were unable to utilize the credit and were exporting services, the credit was refunded to them in cash under Rule 5 of the Cenvat Credit Rules. The appellant contended that the service tax confirmed against them was also available as modvat credit, which they could have refunded. They requested a remand to the Commissioner for a decision on this issue.

3. The advocate highlighted that the Commissioner did not address this plea, suggesting a remand for consideration. The Tribunal agreed with the advocate's contention and set aside the impugned order, remanding the matter to the Commissioner for a decision on the appellant's plea. The appellant was permitted to refer to various judicial decisions on the matter. The Tribunal clarified that they did not delve into the case's merits, keeping all other issues open. The stay petition and appeal were disposed of accordingly.