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TMI Blog2024 (3) TMI 1286X X X X Extracts X X X X X X X X Extracts X X X X ..... hat to after rejection of the refund cannot take place of an Order as envisaged in the proviso to Rule 3(1)(iii) of Export of Service Rules, 2005. It is found that the argument of the appellants that development of Software Services rendered by the appellants is linked to the R D Agreement is not acceptable. The appellants have also taken the plea that prior to 16.05.2008, they have claimed refund of Business Support Services and not in respect of ITSS Services and thus, partial refund claim was wrongly rejected to the tune of Rs.2,81,87,493/-. This claim needs to be verified from the records by the Adjudicating Authority. Though, it is held that during the relevant period, the appellants are not entitled to refund of CENVAT credit on services utilized for ITSS Services, they would be eligible for the refund of CENVAT credit on services utilized for other services, if otherwise, applicable. For this reason, it is found that the matter requires to go back to the Original Authority. Whether the appellants are eligible to avail CENVAT credit when the supplier of services pays service tax on a mistaken notion of law? - HELD THAT:- As there is no dispute regarding the fact of duty being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lting Engineer Services , Scientific and Technical Consultancy Services , Business Support Services etc.; The appellant filed four refund claims for the four quarters during October 2007 to December 2008. Deputy Commissioner of Service Tax Gurgaon, vide order dated 05/08/2010, sanctioned a refund of Rs.2,70,28,608/- out of Rs.6,40,72,994/- claimed by the appellants which was upheld by the Commissioner (appeals) vide impugned order. The grounds of rejection of part of the refund were that: the services claimed to have been exported to M/s Agilent Technologies, Singapore does not qualify to be an export in terms of Rule 3(1)(iii), of Export of Service Rules,2005 for the reasons that the service receiver and the appellant are same group companies and the agreement did not provide for services related to Information Technology (ITSS). the appellant has availed CENVAT Credit on Diesel generator on which their supplier paid Service Tax even though it was not payable. there was a mismatch between the refund claims and ST/3 returns. 3. Ms. Krati Singh, Learned Counsel for the appellants submits that the impugned order erred in holding that the appellant was a commercial establishment of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mits in addition that Service Tax paid by the supplier of the generator cannot be denied as no action was taken at the supplier s end. She relies on the following: CCE C,Surat-III Vs Creative Enterprises 2008 (7) TMI 311 - Gujarat High Court (affirmed by SC in 2009 (7) TMI 1206 - SC ) CCE Pune, Pune Vs Ajinkya Enterprises 2012 (7) TMI 141 - Bombay High Court M/S. Lanxess India Pvt Ltd Vs CCE, Thane- I 2022 (12) TMI 1187 CESTAT Mumbai The Joint Commissioner of Commercial Taxes (Appeals) -6, Bengaluru., The Deputy Commissioner of Commercial Taxes (Audit) 6, 7, Bengaluru Vs. Rajshree Impex, 2021 (7) TMI 307 - Karnataka High Court. CCE, East Singhbhum Vs Tata Motors Ltd. [2013 (294) E.L.T. 394 (Jhar.)] 7. Learned Counsel submits further that in any way Service Tax paid on generator under Supply of Tangible Goods Services could not be denied after 16/05/2008. She also submits that credit cannot be denied because of mismatch of entries in ST3 Returns. She relies on the following: M/s Temenos India Private Limited Vs CST, Chennai 2020 (2) TMI 354 - CESTAT Chennai Broadcom Research Pvt Ltd [2016 (42) STR 79 (TBang)] affirmed at [2016 (43) STR 321 (Kar.)] 8. Shri Nikhil Kumar Singh, assiste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 3(1)(iii) provides that if the recipient of the taxable service has any commercial establishment or any office relating thereto in India, such taxable service shall be treated as export only if the orders of provision of such service is made by the recipient of such service from any office commercial establishment or any office located outside India; however, we find that learned Commissioner has not given any finding on this issue. We find that as contended by the appellants, the appellants M/s Agilent Technologies (International) Pvt. Ltd. and M/s Agilent Technologies, Singapore though are group companies belonging to M/s Agilent Technologies, U.S.A, they are independent entities incorporated/ registered in the respective countries. Therefore, it cannot be held that the appellants are commercial establishment or any office of M/s Agilent Technologies, Singapore, in India. To this extent, we are in agreement with the submissions of learned Counsel for the appellants and are of considered opinion; the proposition cannot be a reason to consider the service provided by the appellants as not an export to M/s Agilent Technologies, Singapore. 14. However, we find that learned Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant, for providing ITSS Services during the relevant period. We find that the addendum and the certificate issued much later than the impugned period that to after rejection of the refund cannot take place of an Order as envisaged in the proviso to Rule 3(1)(iii) of Export of Service Rules, 2005. We find that the argument of the appellants that development of Software Services rendered by the appellants is linked to the R D Agreement is not acceptable. We find that the case laws relied upon by the appellants in this regard is not applicable as the facts of the cases are different. 18. Learned Counsel for the appellants also submits that refund of CENVAT credit cannot be denied without raising the demand of service tax on the appellants; they would submit that in case the ITSS Service rendered by them to M/s Agilent Technologies, Singapore was not to be considered as export of service, Department should have raised a demand for provision of the said services. We find that Tribunal held in a number of cases that refund of CENVAT credit on export of services cannot be denied holding that the said provision does not merit to be termed an export of service unless a commensurate demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ored. We also find force in the submission of learned Counsel about applicability of Rule 3 of Place of Provision of Services Rules, 2012 which provides that generally the place of provision of service is the location of service recipient therefore since in the instant case the location of service receiver M/s. HLX is located outside India i.e. USA therefore the place of provision of service is outside India and hence the service in issue qualify export of services in terms of Rule 6A of Service Tax Rules, 1994. 8. In view of the discussions and findings recorded in the preceding paragraph, we are of the considered view that the orders of lower authorities denying Cenvat credit on impugned services are not sustainable in law and therefore the appeals filed by the appellant deserve to be allowed. The appeals are accordingly allowed subject to calculation of refund of un-utilised Cenvat credit by the adjudication authority on the basis of the documents submitted by the appellants and for this limited purpose these appeals are remanded to the original authority. The said authority is directed to dispose of the refund claim within a period of three months from the date of receipt of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the duty on final products has been accepted by the department, CENVAT credit availed need not be reversed even if the activity docs not amount to manufacture. Admittedly, similar view taken by the Gujarat High Court in the case of Creative Enterprises has been upheld by the Apex Court [see 2009 (243) E.L.T. A121] by dismissing the SLP filed by the Revenue. 21. In view of the above, we find that as there is no dispute regarding the fact of duty being paid on the generator, credit cannot be disallowed at the service receiver s end. Learned Authorized Representative for the Department submits that all the cases cited by the appellant are in the realm of Central Excise and therefore, not applicable to the issue of service tax. We are not inclined to accept this proposition. The basic principle of CENVAT credit being same under Central Excise Service Tax regime, any differentiation in this regard would be artificial. 22. Coming to the third issue of rejection of refund for the reason that the ST-3 Returns do not tally with the CENVAT credit Register, we find, as submitted by the appellants, that learned Commissioner has not given any findings on the same. We find that in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t aside the rejection of refund on this ground. Further I find that the Commissioner (Appeals) in the impugned order has observed that the appellants have not submitted any 11 documents to prove their contention that they have rightly availed the cenvat credit. It appears that both the authorities have not examined all the documents which have been filed by the appellant in support of their refund claim. In view of this, I set aside the impugned order and remand the matter back to the original authority to examine the refund claim on the basis of other documents filed by the appellant. Accordingly, both the appeals are allowed by way of remand to the original authority. The original authority will provide adequate opportunity to the appellant to produce all the documents which they may rely in support of their refund. Consequently, both the appeals are allowed by way of remand. Following the above ratio, we set aside the impugned order to this extent also and allow the claim of the assessee on this ground. 23. In view of the above, we find that refund cannot be rejected for the reason that there is a discrepancy between the CENVAT record and ST-3 Returns. However, we are in agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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