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TMI Blog2022 (5) TMI 867X X X X Extracts X X X X X X X X Extracts X X X X ..... of SAMSUNG R D INSTITUTE INDIA BANGALORE PVT. LTD. VERSUS C.C.E C.S.T. -BANGALORE SERVICE TAX- I [ 2019 (7) TMI 1418 - CESTAT BANGALORE] . The issue of nexus in respect of the services, raised in the impugned orders are now settled. Therefore, on the issue of nexus, the appeals are allowed. Refund of credit of service tax wherein invoices were raised in the USD, in respect of ITSS Services - HELD THAT:- It is seen that the refund relates to invoices raised by many companies (around twenty); though the services were procured in India, receipts were in foreign currency; the appellant s claim that they have sub-contracted part of their activity to these vendors. It is a argument of the appellants that these services were utilised by them while rendering service to the overseas entity. However, it is found that as per the tripartite agreement between TI, USA, TI, India and the vendors payments are made in foreign currency by TI, USA, implying thereby that the service recipient is TI, USA and not the appellant. Therefore, the services of vendors can be at best treated as export by the vendors themselves and not the TI, India, the appellant. It is clear that even as per the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Refund of service tax paid under Reverse Charge Mechanism (RCM) in respect of ITSS services,Management or Business Consultant Services, Management, Maintenance and Repair Services, Business Support Services, paid under RCM, is not admissible. (iv) Refund of services locally procured but billed in US Dollars is not admissible. (v) Refund is not admissible on defective invoices. Various appeals filed by the appellants before the learned Commissioner (A) came to be rejected by the impugned orders. Hence, these appeals. 2. Learned counsel Shri Ravi Raghavan appearing on behalf of the appellants submits that the issues involved appeal-wise and issue-wise as follows: 3. Appeal No.ST/02081/2012, ST/27990 to 27993/2013 : Learned counsel submits that the department contends that the marketing services provided to Texas, Singapore, do not qualify as export of service as per the Export of Service Rules since the service is not used in India; the appellant is not eligible to avail CENVAT credit in respect of Event Management Services, Security Service, Outdoor Catering Service, etc., on the ground that there is no nexus of the inputs/output services provided by them; refund of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ITSS and Consulting Engineering services procured locally and billed in INR was denied alleging that they have no nexus with the exported output service; he submits that the appellant is engaged in in provision of ITSS service and hence, Consulting Engineering services are integrally connected to the same; the places reliance on Commissioner vs. Hollister Medical India 2017 (49) STR 426 (Tri. -Del.). 4.3 Refund of credit of service tax on some input services used in the provision of output services exported were denied alleging lack of nexus; learned counsel submits that the disputed services are integrally related to the output service; it is covered by the decisions of Tribunal in the cases of Chevron Phillips Chemicals v. Commissioner of CGST, 2021 (53) GSTL 268 (Tri. -Mumbai) and Goldman Sachs Services v. Commissioner of CT, 2021 (52) GSTL 425 (Tri. -Bang.). 5. Appeal No.ST/21448/2015: Refund of credit of service tax on input services in the provision of output services exported is denied due to the absence of nexus. Learned counsel relies on the Board Circular DOF No. 334/1/2012-TRU dated 16.3.2012 wherein it clarifies that no correlation is required as the intentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and Statement of Works with the vendors 6. Appeal No. ST/21474/2015: Refund of credit relating to Management Consultant Service, Management, Maintenance and Repair Service or Business Support Service of service tax under RCM was denied as there was no evidence to prove that these services were used directly for export. Learned counsel relied on Board Circular 16.3.2012 and places reliance on 24/7 Customer Pvt Ltd V. Commissioner of Central Tax, Bengaluru East 2021-TIOL-160- CESTAT-BANG. 6.1 Refund of credit of service tax on some input services procured locally and used in the provision of output services, is denied, due to the absence of nexus. Learned counsel submit that the Department cannot dispute the appellants eligibility to credit during the refund proceedings; credit, if any, sought to be disallowed, has to be disputed by initiation of separate proceedings for recovery under Rule 14 of the CCR, 2004; and places reliance on M/s. Gemini Software Solutions Pvt. Ltd. vs. CCE, Trivandrum 2020- TIOL-140-CESTATBANG.; the input services are used for the purpose of carrying out the appellant s business and nexus has been explained in detail to the lower authorities. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmits that the services received from Spirent Communications in respect of the maintenance of software is integral and essential to the output activity of the Appellant; the Appellant has been receiving Business Auxiliary Services from NASCOM, which is necessary for the Appellant s output service and not club association services as alleged by the Learned Commissioner. 7. Learned Authorized Representative reiterates the findings of the impugned orders and submits that the learned Commissioner has examined the claim of the appellants and has given specific findings in each of the refund claims as to how an input service claimed for refund was not eligible. With reference to the appellant s claim of refund on account of services received by them from a third party and for which the payment was made in USD, he submits that the services were not availed by the appellant but by their overseas entities for which amount has been paid in USD. The appellants have received the money from their overseas entities in USD and paid to the Indian service provider in INR. The appellant was not the service recipient and therefore, refund of the service tax paid is not applicable to the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices 21 Courier Services 6 Legal Consultancy Services 22 Security Agency Service 7 Sponsorship Services 23 Other Services 8 Consultancy Services 24 Architect Services and Design Services 9 Market Research Agency Services 25 Consulting Engineer s Service 10 Scientific or Technical Consultancy Services 26 Rent Management Service 11 Company Secretary Services 27 Information Technology Software Services 12 Erection, Commissioning Installation Services 28 Interior Decorators Services 13 Storage Warehousing Services 29 Market R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndors. It is a argument of the appellants that these services were utilised by them while rendering service to the overseas entity. However, we find that as per the tripartite agreement between TI, USA, TI, India and the vendors payments are made in foreign currency by TI, USA, implying thereby that the service recipient is TI, USA and not the appellant. Therefore, the services of vendors can be at best treated as export by the vendors themselves and not the TI, India, the appellant. We find that Original and Appellate Authoritieshave given correct finding in this regard. As an example, we find it useful to extract the findings on the issue from one of the orders. In respect of Appeal No.ST/21448/2015, the Original Authority finds as follows: 27.5. As per the Agreement, the assessee has agreed to procure from the above units the services relating to software development/ customization, Application Specific Integrated Circuit (ASIC) design, verification and validation, physical design, design-for-test (DFT) and analog engineering from its service centres situated in India (Offsite) and also onsite on It locations . 27.6. Further, as per the agreement Deliverable shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amounts claimed by the assessee pertaining to other service providers such as M/s Interra Systems, M/s L T, M/s Mind Tree Ltd., M/s Tessolve. I also observed that the assessee has not produced any evidences like agreements, Statement of Works and Certificate from their vendors that the said services are actually used by TI India and not by TI Inc. USA and the same are input services used in relation to the exported output services and they have paid service tax. Also the assessee had not provided any evidence on record to prove that the service tax is being discharged by their vendors and proved the nexus of the input services with the export of output services. 27.10. In addition to the discrepancies mentioned above, it is also noticed from the input invoices submitted by the assessee that in some of invoices it is mentioned in the location of services provided column as OFFS/ Offshore , hence if the services provided are offshore, it cannot be input service for M/s Texas Instruments India Pvt. Ltd., Bangalore. Further, in respect of all the invoices above there are agreements/ Statement of Works as per which the service is delivered, assessee has not furnished the agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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