2019 (1) TMI 434 - AT - Service Tax

Refund of accumulated CENVAT Credit - export of services or not - Rule 5 of Cenvat Credit Rules, 2004 - It appeared to revenue that appellants were providing taxable services to M/s Jubilant Biosys Ltd. and such services were classified by revenue under the category of Scientific or Technical Consultancy Services - Held that - Similar issue decided in appellant own case M/S JUBILANT CHEMSYS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE& SERVICE TAX, NOIDA 2018 (4) TMI 1399 - CESTAT ALLAHABAD where it was held that The appellant have satisfied both the conditions for export of service, namely rendering of service from India and receipt of the service by the client outside India of consideration in convertible foreign currency in India. The issues involved in the present appeal are already decided in respect of the same appellant for the earlier period in favour of the appellant - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
- Appellant's eligibility for benefits under Export of Services Rules, 2005
- Appellant's liability for service tax and penalties

Analysis:

Issue 1: Appellant's eligibility for benefits under Export of Services Rules, 2005
The appellant, a company with a 100% Export Oriented Unit, was registered for service tax payment and Cenvat credit. The dispute arose regarding the classification of services provided by the appellant to companies abroad. The Revenue contended that the services fell under Scientific or Technical Consultancy Services, while the appellant argued that they were covered by Export of Services Rules, 2005. The Original Adjudicating Authority denied the benefit to the appellant. The appellant cited previous Tribunal orders that favored their position, emphasizing that they were not subcontractors but co-venturers in executing assignments for foreign clients. The Tribunal, in line with previous decisions, found that the appellant had satisfied conditions for export of service, rendering services from India and receiving consideration in convertible foreign currency. Consequently, the impugned orders were set aside, granting relief to the appellant.

Issue 2: Appellant's liability for service tax and penalties
The Revenue acknowledged that the issues in the present appeals had been previously decided in favor of the appellant through Final Orders dated 02.05.2017 and 11.04.2018. The Tribunal referred to the findings in these orders, emphasizing that the appellant was not liable for interest on duty paid through the CENVAT account when a sufficient balance was available. Citing relevant case law, the Tribunal held that interest was not payable if the necessary credit was accessible in the CENVAT account during the relevant period for debit. As both issues had been favorably resolved for the appellant in the past, the impugned orders were set aside, allowing both appeals and entitling the appellant to consequential relief as per law.

In conclusion, the Tribunal's judgment favored the appellant on both issues, affirming their eligibility for benefits under Export of Services Rules, 2005 and relieving them of service tax liabilities and penalties based on previous decisions and legal interpretations.