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TMI Blog2009 (5) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... ss auxiliary service. b) They use several input services like Advertisement Agency Services, Chartered Accountant Services, Management Consultancy Services, Leased Circuit Services, Courier Services, Erection Commissioning and Installation services, Manpower, Recruitment or supply agency services, rent-a-cab operator services, Management, maintenance or repair services, Telephone services, Security Agency Services, Outdoor catering services, Mandap keeper services, Banking and other financial services, Cargo handling services, Real estate agent services, computer network, services of practising chartered account, guest house services, air travel services. c) They have also received and used management consultancy services from a Foreign Company. Since the said foreign service provider did not have any office in India the respondents have, as a recipient of services, registered themselves and paid service tax on this management consultancy services. d) By Notification No. 9/2005-S.T. dated 15.3.2005, the Central Government notified the Export of Service Rules 2005. Rule 4 permitted export of services without payment of service tax. Rule 5 enabled the Central Government to provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services of the nature of the service being provided by the party. c) The assessee did not declare which services were input services for the output services being provided by them. 5. Learned Advocate for the assessee made the following submissions- a) They are into only export of services. All the input services for which rebate is claimed have been used for rendering of export services. b) The Notification 12/2005 prescribing rebate has been issued subject to the conditions, limitations and procedures specified there under. The conditions and limitations have been separately prescribed under clause (2) of the notification. The procedure including the one relating to filing of declaration has been separately prescribed under the heading procedure. c) The late filing of the declaration as per notification dated 19.4.2005 is a procedural lapse. The non-observance of a procedural condition of a technical nature cannot be used to deny the substantive concession. Further, in respect of export, a liberal view requires to be taken. The non-fulfilment of the procedure cannot lead to denial of the benefit under The beneficial legislation providing for export benefits. Further, when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of notification is reproduced below:- "2. Conditions and limitations: (a) that the taxable service has been exported in terms of Rule 3 of the said rules and payment for export of such taxable service has been received in India in convertible foreign exchange; (b) that the duty, rebate of which has been claimed, has been paid on the inputs; (c) that the service tax and cess, rebate of which has been claimed have been paid on the input services;- (d) the total amount of rebate of duty, service tax and cess admissible is not less than five hundred rupees; (e) no CENVAT credit has been availed of on inputs and input services on which rebate has been claimed; and (f) that in case,- (i) the duty or, as the case may be, service tax and cess, rebate of which has been claimed, have not been paid; or (ii) the taxable service, rebate for which has been claimed, has not been exported; or (iii) CENVAT credit has been availed on inputs and input services on which rebate has been claimed, the rebate paid, if any, shall be recoverable with interest as per the provisions of Section 73 and Section 75 of the Finance Act, 1994 (32 of 1994) as if no service tax and cess have been paid on s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 2005 were notified by the Central Government vide Notification No.9/2005 dated 3.3.2005. Rule 4 provides that any taxable services can be exported without payment of service tax. Rule 5 of the said rules enables the Central Govt. to issue notification "to grant rebate of service tax paid on such taxable services or service tax or duty paid on input services or inputs, as the case may be, used in providing such taxable service". It is worthwhile to remember that Rule 5 is only enabling provisions unlike Rule 4. Accordingly, Notification No.12/05 dated 19.4.05 has been issued by the Central Govt. providing for "rebate of the whole of the duty on excisable inputs on the whole of ST and cess paid on taxable input services used in providing taxable service exported" subject to the conditions and limitations prescribed therein and subject to following the procedure prescribed therein. Under the said Notification, the exporter of services was required to file a declaration, prior to the date of export of service, inter alia, containing details like the description of the inputs and the input services actually required to be used in providing taxable service to be exported. 6.3 The term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of duty under the Central Excise Rules, 2002, in respect of such duty; or claims rebate of service tax under the Export of Service Rules, 2005 in respect of such tax. Provided further that no credit of the additional duty leviable under sub-section (5) of Section 3 of the Customs Tariff Act shall be utilised for payment of service tax on any output service. Explanation : For the purposes of this rule, the words 'output service which is exported' means the output service exported in accordance with the Export of Services Rules, 2005.]" 6.7 From the above, it is clear that there can not be two different yardsticks, one for permitting credit and the other for eligibility for granting rebate. Whatever credit has been permitted to be taken, the same are permitted to be utilized and when the same is not possible there is provision for grant of refund or as rebate. With out questioning the credit taken, the eligibility to rebate can not be questioned. 7.1 In common parlance, if the cost of such goods and services becomes part of the cost of the final product or the cost of the output services, as the case may be, then they are understood as input and input services in relation to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as input services as recruitment of personnel is part of the activities in setting up the office; that the services of Chartered Accountant engaged in running the company providing the service are to be treated as input services; that the services of outdoor caterer to provide meals and snacks and also services of travel agent for providing pick up and drop, as part of the requirement of the Policy of the Haryana Govt. as the customer care centre are run at odd hours to cater the need of the overseas customers in different time zones are to be treated as input services; that security Agency services cannot be treated as anything other than input services. 7.7 On the other hand, it was contended by the Department that certain services used for maintenance of capital goods as assets cannot be considered as input services. Some services which are having peripheral connection with output services and not having direct nexus cannot be treated as input services. It was contended that to be qualified as input services they should be used in providing taxable services. 7.8 The Tribunal in the case of CCE, Hyderabad IV vs. Deloitte Tax Services India Pvt. Ltd. reported in 2008 (8 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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