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2018 (10) TMI 1373 - AT - Service TaxCash refund - export of services or not - Rule 5 of CENVAT Credit Rules 2004 - rejection on the ground that the services since performed in India therefore do not fall under the scope of export of service - Held that - In their own case Fertin Pharma Research Development Pvt. Ltd. 2017 (7) TMI 1238 - CESTAT MUMBAI this Tribunal has already taken a view that the services rendered by the appellant are in the nature of export service and hence eligible to cash refund of accumulated CENVAT Credit. There are no merit in the contention of the learned AR for the revenue that the ratio laid down by the Hon ble Bombay High Court in M/s SGS India Ltd. s case 2014 (5) TMI 105 - BOMBAY HIGH COURT cannot be made applicable to the facts of the present case on the ground that in the said case the Place of Provision of Service Rules, 2012 was not considered - This Tribunal while interpreting the provisions of new Rules that is Place of Provision of Service Rules 2012 followed the ratio laid down in the said case in reiterating the basic principle of levy of service tax and observed that it is a consumption-based levy accordingly the technical and consultancy service commences from the stage of undertaking the test on the goods procured and the service is completed on delivery of the test report/certificate to the overseas client - The appellants are eligible to cash refund of the accumulated CENVAT Credit under Rule 5 of the CENVAT Credit Rules 2004. The matters are remanded to the adjudicating authority to calculate the admissibility of refund amount except the credit availed on input services viz. Building maintenance charges and rent-a-cab service - Appeal allowed by way of remand.
Issues Involved:
1. Whether the services provided by the appellant to their overseas customer qualify as 'export service'. 2. Whether the input services on which credit was availed fall within the scope of 'input service' under Rule 2(l) of the CENVAT Credit Rules, 2004. Issue-Wise Detailed Analysis: 1. Qualification of Services as 'Export Service': The appellant provided "Technical Testing and Analysis Service/Scientific and Technical Consultancy Service" to an overseas customer in Denmark. The adjudicating authority and the Commissioner (Appeals) held that these services did not qualify as 'export service' because they were performed in India. The appellant argued that under Rule 6A of the Service Tax Rules, 1994, and the Place of Provision of Services Rules, 2012, the services should be considered as exported since the recipient was located outside India and the payment was received in convertible foreign exchange. The Tribunal noted that the appellant had previously been granted a favorable judgment in a similar case (Fertin Pharma Research & Development Pvt. Ltd.), where it was determined that services provided to an overseas recipient qualified as 'export service'. Additionally, the Tribunal referenced the case of Advinus Therapeutics Ltd., which also supported the classification of such services as 'export service'. The Tribunal concluded that the services rendered by the appellant were indeed export services, entitling them to a cash refund of accumulated CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004. 2. Eligibility of Input Services for CENVAT Credit: The appellant claimed CENVAT Credit on various input services used in providing the output taxable services. The Commissioner (Appeals) allowed the credit for most input services but denied it for Building Maintenance Service and Rent-a-cab Service. The Tribunal upheld the denial of credit for these two services. It was observed that the appellant failed to provide necessary evidence to establish the nexus between Building Maintenance Service and the output service. Additionally, Rent-a-cab Service was excluded from the definition of 'input service' after an amendment to Rule 2(l) of the CENVAT Credit Rules, 2004, effective from April 1, 2011. Conclusion: The Tribunal held that the services provided by the appellant qualified as 'export service', making them eligible for a cash refund of accumulated CENVAT Credit, except for the credit availed on Building Maintenance Service and Rent-a-cab Service. The matter was remanded to the adjudicating authority to calculate the admissible refund amount, excluding the denied input services. Disposition: The appeals were disposed of accordingly, with the Tribunal pronouncing the judgment in court on September 28, 2018.
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