Microsoft India (R & D) Pvt. Ltd. Vs Commissioner of Central Excise and Service Tax (CESTAT Bangalore)
The CESTAT Bangalore considered an appeal filed by Microsoft India (R & D) Pvt. Ltd. against the order of the Commissioner of Central Excise and Service Tax, Bangalore, which had rejected the appellant’s refund claim and confirmed a demand of ₹40,52,313, along with interest and an equal penalty.
The appellant provided customer care and product support services relating to Microsoft software products through its Global Technical Support Centre in Bangalore. It was registered as a 100% Export Oriented Unit under the Software Technology Park of India scheme and claimed refund of accumulated CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004. For April 2010 to March 2011, a show-cause notice proposed denial of credit relating to Event Management (₹4,81,289), Outdoor Catering (₹14,66,348), Mandap/Shamiana Service (₹8,456), and Rent-a-Cab Service (₹20,96,220).
The Commissioner denied the credit on the grounds that the services did not have the requisite nexus with the taxable output services and that their absence would not directly affect the quality or efficiency of the appellant’s taxable services.
Before the Tribunal, the appellant submitted that the services qualified as “input services” under Rule 2(l) of the CENVAT Credit Rules, 2004, and that credit for the same services had been allowed for the preceding period. It also relied upon the principle of consistency and pointed out that refunds involving the same input services had been granted for other periods.
