2019 (3) TMI 977 - AT - Service Tax

Refund claim - Selling of Space or Time Slot for Advertisements - Renting of Immovable Property - rejection of the said refund claims on the ground that the Adwords services cannot be held to be Cenvatable input services used in providing output export services - Held that - The Appellate Authority has passed a detailed order based upon the law declared by the Larger Bench of the Tribunal - Admittedly, assessee was providing services to M/s Google Asia Pacific Pte. Ltd., Singapore, which was located outside India and the input services were being received from an altogether different legal entities i.e. M/s Google India Pvt. Ltd. Gurgaon. Similarly, he has examined clause (d) Rule 6A of the Service Tax Rule and has correctly held that the place of provisions of the service was outside India - Commissioner (Appeals) has also referred to the Tribunal s decision in the case of Vodafone Essar Cellular Ltd. vs. CCE 2013 (7) TMI 178 - CESTAT MUMBAI wherein the telecom service provided to the customers of the foreign telecom service provider while using the assessee s telecom network in India for which the consideration was paid in foreign currency, was held to be export of services inasmuch as the foreign telecom service provider, was the recipient of the services and was located outside. There are no reasons to interfere in the above findings of Commissioner (Appeals) - appeal disposed off.

Summary

Issues:
Refund claims under Cenvat Credit Rules rejected by Original Adjudicating Authority - Appeal filed before Commissioner (Appeals) - Criteria of Rule 6A (d) of Service Tax Rules - Place of provision of services outside India - Nexus between input and output services - Applicability of input service credit - Legal grounds for refund claim upheld by Commissioner (Appeals) - Requirement of supporting documents for refund claims.

Analysis:
The judgment by Appellate Tribunal CESTAT ALLAHABAD involved the disposal of appeals filed by the Revenue concerning refund claims under Cenvat Credit Rules. The respondents, registered for providing taxable services, filed refund claims rejected by the Original Adjudicating Authority based on the grounds that the input services, namely "AdWords," did not have a nexus with the output services and did not meet the criteria of Rule 6A (d) of the Service Tax Rules regarding the place of provision of services being outside India. The Original Adjudicating Authority held that the input service credit availed by the assessee was not admissible due to the service provider and recipient being the same entity, Google.

The respondents appealed before the Commissioner (Appeals), who considered the services provided by the assessee as qualifying for export of services based on previous Tribunal decisions. The Commissioner (Appeals) noted that the input service credit was available as the service recipient and provider were different legal entities. The Commissioner (Appeals) upheld the refund claim of the input credit, citing the fulfillment of Rule 6A (d) conditions and the place of provision of services being outside India.

The Revenue reiterated their grounds in the appeal, arguing that the assessee failed to establish the conditions of Rule 6A of the Service Tax Rules. They contended that the services provided fell under Online Information and Database Access services, with the location of the service provider being crucial in determining the place of provision of services. The Revenue also raised concerns about the lack of examination of documents by the Commissioner (Appeals).

The Appellate Tribunal, after reviewing the grounds of appeal, found that the Commissioner (Appeals) correctly applied the law declared by the Larger Bench of the Tribunal. The Tribunal affirmed that the services provided to a foreign entity located outside India and the input services received from a different legal entity supported the export of services claim. The Tribunal referenced a previous decision involving telecom services to support the export of services determination. Despite the Revenue's argument regarding supporting documents, the Tribunal upheld the Commissioner (Appeals) decision based on legal grounds, emphasizing that the Lower Authorities should examine refund claims with proper documentation support. The appeals of the Revenue were disposed of accordingly.