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TMI Blog2025 (1) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... ting recovery of the allegedly availed irregular Cenvat credit, by taking recourse to Rule 14 ibid read with Section 73 ibid. On the other hand, the department had raised the issue of non-establishment of nexus between the input services and exported output service for the first time, while adjudicating the subject refund claims filed under Rule 5 ibid by the appellant.' Further the Respondent-Assessee filed the appeal before the Commissioner (Appeals) not against the order of the Assistant Commissioner but against the observations made in discussion and findings of the Order. Learned Commissioner (Appeals) multiplied these findings without any change in the order portion which in any case was in accordance with the claim filed by the Respondent-Assessee. Conclusion - The department had not proceeded against the appellant for effecting recovery of the allegedly availed irregular Cenvat credit, by taking recourse to Rule 14 ibid read with Section 73 ibid. Appeal of Revenue dismissed. - HON BLE MR. P. K. CHOUDHARY , MEMBER ( JUDICIAL ) And HON BLE MR. SANJIV SRIVASTAVA , MEMBER ( TECHNICAL ) Shri A. K. Choudhary, Authorized Representative for the Appellant Shri Atul Gupta, Advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the Appellant-Department has reiterated the grounds of appeal and prayed that the impugned Order-In-Appeal be set aside. 8. The learned Advocate appearing on behalf of the Respondent-Assessee submitted that:- (a) Eligibility of cenvat credit cannot be questioned at the stage of refund- Availability of cenvat credit was raised without jurisdiction., (b) He further submits that the Department has not issued any SCN under Rule 14 of Credit Rules read with Section 73 of the Finance Act, 1994 for denial and recovery of Cenvat credit, alleging that the credit was not admissible because the services on which credit was taken were not falling under the definition of 'Input Service'. Therefore, since no SCN has been issued previously disputing the taking of Cenvat credit itself, the same cannot be disputed at the stage when the Appellant has filed refund application under Rule 5 of Credit Rules. As the credit has not been denied under Rule 14, therefore the same is available to the Appellant and a refund of the same is to be allowed under Rule 5 of the Credit Rules. Therefore, the observation in Order-In-Original were without jurisdiction as SCN was not issued. (c) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2016 under rule 5 of Cenvat credit Rules, 2004 read with Notification No. 27/12-CE(NT) dt. 18.06.12 for the period July 2013 to September 2015 which is well within the period of one year asstipulated time period under Section 11B of Central Excise Act. 1944. (ii) The party have declared that no separate claim for drawback of refund has been or will be made under the Customs and Central Excise Duties Service Tax Drawback Rules, 1995 or for claim of rebate under Central Excise Rules, 2002 or the Export of Services Rules, 200$ or under Section 93 or 93A of Finance Act, 1994 (32 of 1994). (iii) he party have exported the taxable services to their overseas customers under rule GA of Export Service Tax Rules, 1994. The export turnover of the services determined in term of clause D of Sub rule (1) of Rule 5 of Cenvat Credit and certified by the auditor M/s S.R. Batliboi Co.. Gurgaon in annexure-A-1 is Rs.6,13,76,25,446/- and value of all services provided is Rs. 7,59,83,21,871/-. The party has enclosed details of export billing and realization thereon correlating export realization with respective FIRCs filed with the refund claim which has been verified by the range superintendent and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g period July 2015 to September 2015 is Rs. 2,59,85.21871/- and Export turnover is Rs. 6.13.76.25.446/-- which is 80.78% of total turnqver. I also observe from the refund claim filed in Form A by the party. that they have taken Cenvat Credit of Rs.48.52.24.841/- during the relevant quarter and out of which Rs. 1,39,04,923/- is inadmissible to them as discussed above and Rs. 2,43,86,447/- relating to SEZ units.. Hence, I am of the opinion that the both the aforementioned amount cannot be taken for the calculation as per the formula prescribed under the Notification No. 27/2012-CE(NT) dated 18.06.2012. the maximum eligibility of refund as per formula prescribed in the Notification No. 27/2012-CE(NT) dated 18.06.2012 shall be as under :- Cenvat Credit taken (A ) Rs. 48,52,24,841/- Cenvat Credit found not eligible for refund (B) Rs. 1,39,04,923/- Cenvat Credit taken on SEZ Unit (C) Rs. 2,43,80,447/- Maximum amount of Cenvat Credit eligible for refund Rs. 44,69,39,471/- Maximum eligibility for refund in terms of the Notification No. 27/12-CE(NT) dt. 18.06.12 read with Rule 5 of Cenvat Credit Rules, 2004 is as under : - Maximum Admissible Refund = Export Turnover x Total CENVAT Credit Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Credit and such input services do not qualify as input services in terms of Rule 2(l) of the CENVAT Credit Rules, 2004. The Respondent - assessee appealed before the First Appellate Authority. The Learned Commissioner (Appeals) passed the following order:- I have carefully gone through the facts and records of the case as well as the submissions made by the appellant. The appellant has contended that no SCN was issued to him before holding that the subject input services were not eligible for credit and thus, the impugned order has been passed in violation of the principles of natural justice. In this regard, I find that the adjudicating authority has, nowhere in the impugned order, stated that SCN had been issued for denial of credit of Service Tax amounting to Rs 1,39,04,923/- and accordingly, I agree with the submission of the appellant that the impugned order, to the extent of denying the credit of Service tax amounting to Rs 1,39,04,923/-, has been passed in violation of the principle of natural justice. The appellant has further submitted that the services in question used by him are services covered by the definition of input service, which I take up one by one as under: 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e invoices involving the credit of Service Tax amounting to Rs.36,10,909/- bear the address of his premises which was registered vide ST-2 dated 26.02.2016. I find that the appellant has submitted copies of ST-2 Certificates dated 09.12.2013, 26.10.2015 and 26.02.2016 to substantiate his point. In this regard, I find that Hon'ble Tribunal-Mumbai, in the case of EXFO Electro Optical Engineering (I) P Ltd Vs CCE, Pune-III [2016(41) STR 65(T-Mum)], has held as under: Refund - Unutilized/accumulated Cenvat credit - Export of services - Input service received at unregistered premises - Undisputedly appellant taken credit on IT enabled services for providing IT services which were exported Service provided from registered office of appellant having centralized accounting system - Addresses of other offices where input service received also added subsequently in registration certificate - Appellant entitled to avail credit and consequent refund of unutilized credit - Appeal allowed - Rule 5 of Cenvat Credit Rules, 2004. [paras 5, 6, 7] With regard to the invoices issued at unregistered premises, amounting to Rs. 15,47,636/-, the appellant has submitted that Rule 3 of the CCR does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice' has two legs- the first leg of the definition, namely, the 'means-clause' covers every service used for providing output service and therefore, any input service which has nexus with the provision of output service, Is eligible for credit of Service Tax paid on it and the 'includes' clause (second leg) duly covers services which are used in the business of provision of service. Various courts have held that the inclusion clause of the definition of input service is only illustrative and not exhaustive. The provisions of Rule 2(1) of the CCR have to be read harmoniously and the 'means' and the 'includes' portions of the definition are to be read holistically. Therefore, in order to qualify as an 'input service', a service has to fall either within the 'means' part or within the 'includes' part of the definition. Accordingly, I hold that the adjudicating authority erred in denying the credit involved on invoices addressed to the un-registered premises of the appellant, and the premises which were got registered later on by the appellant. 3. Credit involved on printing photocopy charges: The appellant has submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Services of Renting of equipments for organizing events and Event Management Service Invoices suggest activities relate to parties, entertainment activities, corporate tournaments - Denial of credit for absence of nexus between input services and services exported HELD: Types of input services covered for purpose of allowing Cenvat Credit of Service Tax paid very wide - In Catena of decisions held that any service in relation to business of providing output service to be covered under Input service definition - Assessee eligible for credit as services qualify as input services - Section 11B of Central Excise Act, 1944 as applicable to Service Tax vide Section 83 of Finance Act, 1994-Rule 2(1) of Cenvat Credit Rules, 2004. [para 5] Moreover, these services have been held as input services by the then Commissioner (Appeals), Central Excise Appeals-l, Meerut, vide order-in-appeal number NOI/SVTAX/000/APPEALS-1/92/2014-15 dated 19.01.2015 also by me, vide orders-in- appeal number NOI/SVTAX/000/APPEALS-1/2668278/2016-17 dated 22/12/2016 28/12/2016 respectively, in the appellant's own cases. Accordingly, I hold that the adjudicating authority erred in denying the credit of Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... units, etc. which are necessary for running the day to day business of the appellant. The important documents have to reach the destination in time for which it is not possible to hand deliver them, and that these services are extremely necessary for the business of the appellant. They also relied upon the judgments rendered in CCE, Vapi v. Apar Industries-2010 (20) STR 624 (Tri.-Ahmd.) which was affirmed in Commissioner v. Apar Industries-2011 (23) S.T.R. J194 (Guj.). The learned DR defended the impugned order stating that the services being used within the country are not available for credit as the appellants are engaged in export of services. To carry out the domain activity of exports, the appellants may require to send documents and such other to Offices, units within the country. Merely because the courier service was utilized within the country it cannot be assumed that the services does not have nexus with output services. The principle laid in the above case laws are also squarely applicable to the instant case. Further there is no dispute that these input services were received by the appellant. I hold that the appellants are eligible for refund of Rs. 6,670/- towards S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal numbers NOI/SVTAX/000/APPEALS-1/266/2016-17 dated 22/12/2016 278/2016-17 dated 28/12/2016, in the appellant's own cases. Accordingly, I hold that the adjudicating authority erred in denying the credit of Service Tax involved on the said services. The appellant has also submitted that he is not contesting the credit of Service Tax amounting to Rs 30,107/- involved on Gym equipment charges, charges for supply of tea, coffee, food, charges for corporate cups and laundry charges. Accordingly , on the basis of above discussion and findings , I pass the following ORDER : The appeal is disposed off in terms of the above discussion. 12. We find that in the absence of any proceedings under Rule 14 of the CENVAT Credit Rules, 2014 observations recorded by the Assistant Commissioner in Para (iv), (v) (vi) of the Order-In-Original reproduced earlier are only in the nature of observations and cannot be taken as denial of CENVAT Credit. Even the Assistant Commissioner has nowhere said so. 13. We find that the Tribunal in the case of Microsoft Global Services Center (India) Private Limited and Microsoft India (R D) Pvt. Ltd. v. Commissioner of Customs, Central Excise Service Tax, Hydera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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