2021 (3) TMI 130 - HC - Service Tax

CENVAT Credit - service tax paid by them prior to registration with the Department - Whether the Tribunal is right in holding that the respondent was entitled for CENVAT credit prior to rendering any service nor getting registered with the Service Tax Department when the decisions relied upon are sub-judice in the Apex Court? - services received from outside India, on which, service tax is to be paid - output service or not - HELD THAT - Karnataka High Court in the case of Commissioner of Service Tax, Bangalore Vs. Aravind Fashions Ltd. 2011 (9) TMI 852 - KARNATAKA HIGH COURT wherein it was held that though the assessee therein was a recipient of service, the service provider being outside India, the assessee therein was to be treated as a service provider and that therefore, the assessee therein was entitled to use CENVAT credit available with it to discharge service tax on the service rendered. CENVAT Credit - service tax paid by them prior to registration with the Department - Whether the Tribunal is right in holding that the respondent was entitled for CENVAT credit prior to rendering any service nor getting registered with the Service Tax Department when the decisions relied upon are sub-judice in the Apex Court? - HELD THAT - High Court of Karnataka in the case of mPortal India Wireless Solutions (P) Ltd. Vs. Commissioner of Service Tax 2011 (9) TMI 450 - KARNATAKA HIGH COURT has held that the service tax registration was not mandatory for refund of accumulated CENVAT credit of service tax paid on input service used for export of service. Application dismissed - decided against Revenue.

Issues:
- Appeal by Revenue under Section 83 of Chapter V of the Finance Act, 1994 read with Section 35G of the Central Excise Act, 1944 against Tribunal's order.
- Substantial questions of law raised by Revenue:
1. Perversity of Tribunal's order.
2. Entitlement of respondent for credit of service tax paid prior to registration.
3. Entitlement of respondent for CENVAT credit prior to service provision and registration.
4. Treatment of services received from outside India for CENVAT credit.

Analysis:
1. The High Court examined the appeal filed by the Revenue against the Tribunal's order. The substantial questions of law raised by the Revenue were considered, including the alleged perversity of the Tribunal's order. The Court noted that these questions had been addressed in previous decisions, leading to a reference to a decision by the Karnataka High Court regarding the treatment of a recipient of service from outside India as a service provider for CENVAT credit purposes.

2. The Court referred to the Karnataka High Court's decision in the case of mPortal India Wireless Solutions (P) Ltd. Vs. Commissioner of Service Tax, which established that service tax registration was not mandatory for the refund of accumulated CENVAT credit on input services used for service exports. This decision, along with another decision by the High Court of Karnataka, influenced the Court's ruling in favor of the assessee regarding the entitlement to CENVAT credit before service provision and registration.

3. Regarding the first substantial question of law raised by the Revenue, the Court deemed it as general in nature and not a question of law, leading to its rejection. Consequently, the Court dismissed the civil miscellaneous appeal by answering substantial questions of law 2, 3, and 4 against the Revenue, ultimately ruling in favor of the assessee. The judgment provided a comprehensive analysis of each issue raised by the Revenue, citing relevant legal precedents and decisions to support its conclusions.

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