2010 (8) TMI 47 - HC - Service Tax

Rebate - Export of Service - The respondent assessee is engaged in rendering customer care services falling under the category of Business Auxiliary Services under the provisions relating to levy of service tax under the Finance Act, 1994. It claimed credit for input services in accordance with Notification No.12/2005-ST dated 19.4.2005. Claim of the assessee for the rebate was for the period from 19.4.2005 to 30.4.2005 and 1.5.2005 to 31.5.2005. Exporter to file declaration prior to export of service. Declaration filed on 9.5.2005 while relevant notification published on 19.4.2005. Delay made due to managerial approval. Held that filing of declaration complied within reasonable period and such filing before export not mandatory. Impugned order holding rebate as admissible, upheld.

Summary

Issues:
1. Interpretation of procedural conditions for availing substantive concessions under Central Excise Act and Finance Act.
2. Comparison of judgments under different notifications for similar claims.
3. Determination of input services eligibility for credit.
4. Compliance with procedural requirements for availing rebate.

Issue 1:
The appeal involved the interpretation of procedural conditions under the Central Excise Act and the Finance Act. The revenue challenged the Tribunal's finding that non-observance of a technical procedural condition cannot be used to deny substantive concessions. The key question was whether the filing of a declaration prior to the export of services, as mandated by Notification No.12/2005-ST, was mandatory and if there was provision for condoning any delay in filing the declaration.

Issue 2:
The comparison of judgments under different notifications for similar claims was another crucial aspect of the case. The Tribunal had to determine if the matter in question was covered by the legal precedent set in C.C.E. Hyderabad IV v. Deloitte Tax Services India Pvt. Ltd., considering the variance in the notifications under which the claims were filed.

Issue 3:
The issue of determining the eligibility of certain services as input services for credit was also addressed. The question arose whether services used solely for maintenance and repair of capital assets, without a direct nexus to output services, could be considered as input services. The eligibility for credit of duty paid on inputs and tax paid on input services was also deliberated upon.

Issue 4:
The compliance with procedural requirements for availing rebate was a significant point of contention. The respondent, engaged in rendering customer care services, claimed credit for input services in accordance with Notification No.12/2005-ST. The original authority rejected the claim, but the appellate authority and the Tribunal upheld the plea, leading to the revenue's appeal.

In conclusion, the High Court dismissed the appeal, stating that no substantial question of law arose. The Court upheld the Tribunal's decision that reasonable delay in filing the declaration for availing the benefit of the notification could not be a bar to the claim, as the procedural requirement could be condoned for valid reasons. The Court also rejected the appellant's argument regarding the eligibility of services as input services, emphasizing that as long as the services were used in providing export services, the rebate claim was admissible. The Court found the appellate authority's findings to be sound and upheld the decision in favor of the respondent.