The Appellant is registered as Multi Product Special Economic Zone (MPSEZ) as a developer of AMRL Hi-Tech City. The Appellant claimed the refund of credit paid on various input services under Rule 5 of CENVAT Credit Rules, 2004 (“CC Rules”) read with Notification No. 12/2013-ST dated July 01, 2013.
Basic question which came up for consideration was eligibility of CENVAT Credit of Service Tax paid on outward transportation of goods upto place of removal. In the instant case, the appellant was denied CENVAT Credit of service tax paid on outward transportation service by the revenue on the premise that such transportation charges are post clearance expenses and therefore cannot be considered as ‘Input Service’.
It was held that the activity of procuring orders for the principal and also exploring potential customers and channelized the purchase orders should be classified under Business Auxiliary Service in accordance with rules of classification of the service.
iT was held that the export turnover portion in the formula prescribed under Rule 5 of CCR includes the value of exports made from SEZ. The Appellants are rendering software services and the services are exported and also to the domestic clients.
It was held that Currency Conversion Charges (mark up) in respect of credit/debit card transactions are not liable to service tax as the card transaction happened outside India.
Learned counsel explains that the Domestic Tariff Area (DTA) unit having paid the service tax on reverse charge mechanism on behalf of SEZ unit of the company, the portion of such tax attributable to the SEZ is denied by the adjudicating authority to avail CENVAT credit thereof.
The taxable services availed by the appellant were to occasion the exports. There appears nexus between export and the service so availed which cannot be ruled out by the authorities below. Once that is present, denial of the refund of the accumulated CENVAT credit to the exporter is unreasonable.
What the learned counsel says is that its right not being abrogated by law and also in absence of any provision in law to deny refund, the unutilised credit of AED is refundable. Following the ratio laid down by the Hon ble High Court of Andhra Pradesh in the aforesaid judgment, appellant is entitled to refund. When law itself does not deny grant of refund of unutilised credit there shall be no question of limitation to apply.
Learned counsel says that maintenance of health of the factory workers where they work in hazardous situation is an essentiality both under statute as well as requirement of the conditions of the employment.
Learned counsel says that pollution control being necessity of law appellant has complied to that law incurring certain expenditure which have suffered service tax. Inadmissibility of CENVAT credit in respect of the service tax suffered having direct relation and intimate connection with the manufacture to prevent pollution, shall be mis-carriage of justice.
