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TMI Blog2018 (11) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellants are eligible to cash refund of the accumulated CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004, except in relation to input service denied by the learned Commissioner (Appeals) observing that there is no nexus between the input and output service, as the necessary evidences in relation to Building maintenance charges were not produced and the rent-a-cab service has been mentioned in the exclusion clause of input service after amendment to Rule to 2(1) of the Cenvat Credit Rules, 2004 with effect from 01.04.2011 - matters are remanded to the adjudicating authority to calculate the admissibility refund amount except the credit availed on Building maintenance charges and rent-a-cab service - appeal allowed by way of remand. - Appeal No. ST/86009/2018 - A/87806/2018 - Dated:- 31-10-2018 - DR. D.M. MISRA, MEMBER (JUDICIAL) Shri Neerav Mainkar, Advocate for Appellant Shri Dilip Shinde, Asst. Commissioner (AR) for Respondent ORDER Per: Dr. D.M. Misra These appeals are filed against Order-in-Appeal No. MKK/353-360/RGD/APP/2017 dated 20.12.2017 passed by the Commissioner of Central Excise Service Tax (Appeals), Belapur. 2. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, and no evidence in this regard has been produced by the revenue. On the other hand, since beginning they have been pleading that the necessary tests were carried out on the goods procured by them independently. Therefore, Rule 4(a) of the Place of provisions of Service Rules, 2012 is not applicable to them. In support he has referred to para 5.4.1 CBE C Education Guide. It is contention that Rule 4(a) of the Place of provisions of Service Rules, 2012 is applicable only if the services provided on the specific goods that was supplied by the recipient of service in order to carry out the relevant services on it. If those goods are not made available, such services cannot be performed. It is his contention that the goods which are required for research work in relation to providing Scientific or Technical Consultancy Services are not those goods which are necessarily to be made available by their overseas client, but these goods could be procured locally or be imported by the appellant in providing the said service. In the present case, the appellants have imported the goods on their own accounts and not supplied by the recipient of service. 3.2 Learned Advocate for the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CCE, Raigad - 2017-TIOL-3448-CESTAT-MUM and submitted that The present facts are identical mirror image of the facts of the aforesaid judgments and hence, the services are since performed in India, therefore, Rule 6A of Service Tax rules, 1994 is not satisfied, consequently, the appellant are not eligible to cash refund of the accumulated cenvat credit. 6. Heard both sides and perused the records. 7. The appellant had undisputedly purchased/procured the goods independently, on which they discharged appropriate customs duty on its import into India. No contrary evidence produced by the revenue to negate the said claim of the assessee. Necessary tests are carried out by them on the said goods in India and after analysis the relevant report was submitted to the overseas company. In the process of providing the said output service, that is, Scientific and Technical Consultancy Service various input services were used on which they availed CENVAT Credit. Since the services are exported, they claimed cash refund under Rule 5 of CENVAT Credit Rules, 2004, but Revenue rejected the refund claims alleging that the service of testing/ analysis of the goods since performed in India, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the judgment that the tax was intended as a levy on activities that would otherwise be performed by the recipient for itself. The new industry of hiving out or outsourcing of what was, conceivably, being done within the enterprise was intended to be subject to the new levy. In the matter of service rendered by respondent, this activity could, but for commercial viability, will be executed by the recipient within its own organization or the territory in which it exists. The satisfaction of the customer occurs upon an outcome which is possessed by the recipient. Hence, even if some of the activities are carried out in India, by no stretch can it be asserted that the fulfilment of the activity is in India. Therefore, the inescapable conclusion is that the location of the actual performance of the service is outside India and, even with the special and specific provision of Rule 4 of Place of Provision of Services Rules, 2012, the performance of service being rendered outside India would render it to be an export. 14. In this context, the legislative intent of incorporating a special and specific provision in Rule 4 may yield further insights. The special provision, which may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Services Rules, 2012 that the taxability is to be determined but from the mischief effect intended to be plugged. It is obviously not intended to tax any activity rendered on goods as to alter its form because that would be covered by excise on manufacture or be afforded privileges available to merchandise trade. The provision itself excludes goods imported temporarily for repairs but that does not, ipso facto, exempt goods imported temporarily for repairs from taxability which would, by default, be predicated by the intent in Rule 3. Consequently, a recipient in India would be liable to tax on such temporary imports for repairs while service to a recipient located abroad would not be taxable. This is in consonance with the privilege of exemption afforded to export of services. The special and distinct role of Rule 4 becomes clearer. 16. Not intended to tax the activity of altering goods supplied by the recipient of service or for repairs on goods, Rule 4(1) of Place of Provision of Services Rules, 2012 would appear, by elimination of possibilities, to relate to goods that require some activity to be performed without altering its form. The exemplification in the Education ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he necessary test report to the overseas client. I do not find any reason to deviate from the aforesaid judgments of this Tribunal. Further, the judgements referred by the learned A.R for the revenue, in my opinion, are not relevant to the facts of the case, inasmuch as in the said judgement the issue raised was levy of service tax on procurement of FDA certificate for the goods to be sold in the respective country. In the circumstances, following the aforesaid precedent, I do not find merit in the impugned order to the extent of holding that the services provided by the appellant are not the export of service. Consequently, the appellants are eligible to cash refund of the accumulated CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004, except in relation to input service denied by the learned Commissioner (Appeals) observing that there is no nexus between the input and output service, as the necessary evidences in relation to Building maintenance charges were not produced and the rent-a-cab service has been mentioned in the exclusion clause of input service after amendment to Rule to 2(1) of the Cenvat Credit Rules, 2004 with effect from 01.04.2011. In the result, the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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