2023 (5) TMI 335 - AT - Service Tax

Refund of CENVAT Credit - Business Auxiliary Service - export of service - denial of benefit of refund, holding that the appellants have not exported the technical service namely, Technical Testing Service, and accordingly, no refund benefit shall be available in respect of the service tax paid on the input services - period of dispute in the present case is prior to June, 2012 - HELD THAT - An entirely identical issue for the earlier period in appellant s own case came before this Tribunal and Tribunal in M/S PPD PHARMACEUTICAL DEVELOPMENT (I) PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI- (VICE-VERSA) 2016 (12) TMI 1234 - CESTAT MUMBAI had allowed the appeals in favour of the appellants by relying upon the judgement of Hon ble Bombay High Court in the case of COMMISSIONER OF SERVICE TAX, MUMBAI-III VERSUS M/S. SGS INDIA PVT. LTD. 2014 (5) TMI 105 - BOMBAY HIGH COURT . On a query from the Bench as to whether the said order of the Hon ble High Court has been further appealed against by Revenue, learned Authorised Representative submitted that he has no knowledge regarding filing of further appeal before the Hon ble Apex Court. Since the issue arising out of the present dispute is no more open for any debate in view of the judgement THE COMMISSIONER OF SERVICE TAX-V VERSUS M/S. PPD PHARMACEUTICALS DEVELOPMENT (I) PVT. LTD. 2018 (8) TMI 1692 - BOMBAY HIGH COURT in the case of appellants themselves, where the issue is entirely identical to that of the issue involved in the present case, there is justification to concur the views expressed by the learned Commissioner (Appeals), for a decision contrary to the orders passed by both this Tribunal as well as by the Hon ble Bombay High Court. There are no merits in the impugned orders, insofar as the adjudged demands were confirmed against the appellants - appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are the denial of refund claims by the department to the appellants for service tax paid on input services, the applicability of Place of Provisions of Service Rules, 2012, and the determination of whether the services provided by the appellants to their parent company located abroad can be considered as export of service.

Refund claims denial:
The appellants, engaged in providing taxable service under 'Business Auxiliary Service,' filed refund applications under Rule 5 of Cenvat Credit Rules, 2004, claiming refund of service tax paid on input services. The department denied the refund, stating that the transactions with the overseas entity cannot be considered as export of service. Appeals were made to the Tribunal against the denial of refund.

Applicability of Rules:
The Advocate for the appellants argued that the Place of Provisions of Service Rules, 2012 should not be applicable for denial of refund as the relevant period predates the enforcement of these rules. Citing previous Tribunal decisions and a Bombay High Court order, it was contended that the activities undertaken by the appellants should be considered as export, entitling them to refund under Rule 5 of Cenvat Credit Rules, 2004.

Export of service determination:
The authorities denied the refund, stating that the appellants did not export the technical service, Technical Testing Service. However, the Tribunal referred to a previous order where a similar issue was decided in favor of the appellants, based on the judgment of the Bombay High Court. The High Court's decision highlighted that services rendered by the appellants, consumed abroad, can be considered as 'export of service,' making them eligible for refund. The Tribunal concurred with this view, allowing the appeals in favor of the appellants and setting aside the impugned orders confirming the demands against them.