Idex India Pvt. Ltd. Vs Commissioner of CGST (CESTAT Mumbai)
CESTAT Mumbai held that as revenue has not demanded any service tax on output service by denying the export status, likewise revenue cannot deny refund by treating the services provided not to be export of service.
Facts- The appellants are into the business of providing taxable services in the categories of Business Support Service, Internet & Telecommunication Services, Information Technology Software and Legal Consultation Services since October, 2013. They are providing Business Support Services to its overseas holding company, M/s. Idex Corporation, USA and its subsidiaries such as Idex, Japan etc. The appellants aid the selling activities of various business units of Idex Corporation by rendering the services viz. Marketing and Promotion Services, Engineering Support Services to the distributors/customers and Accounting & Management Reporting Services. During the period in issue i.e. April, 2015 to June, 2016, the appellants filed refund claims under notification no. 27/2012-CE(NT) read with Rule 5 ibid for unutilised accumulated Cenvat Credit.
The Adjudicating Authority vide Order-in-Original dated 31.05.2017 rejected all the five refund claims filed by the appellant on the ground that the services provided by the appellants to their clients cannot be treated as export of service as provided under Rule 6A of the Service Tax Rules and therefore they are not eligible for refund of the Cenvat Credit lying in balance under the provisions of Rule 5 ibid.
Conclusion- If the Revenue is not in agreement with the claims of the appellants and if, according to Revenue, the services in issue do not fall within the ambit of ‘export of service’ then the Revenue ought to have initiated the proceedings against the appellants for demanding the Service Tax in respect of taxable service provided by the appellants. Admittedly no such proceedings have been initiated by the Revenue as borne out from the records of the case and therefore in a way Revenue itself has allowed this taxable service provided by appellants as ‘export of service.’ If that is so then in the proceeding under Rule 5 ibid Revenue cannot deny refund by treating the service provided not to be export of service.
FULL TEXT OF THE CESTAT MUMBAI ORDER
These appeals have been filed challenging the order dated 31.12.2018 passed by the Commissioner (Appeals) II, CGST & CX, Mumbai by which the appeals filed by the appellants were rejected by holding that the appellants are not eligible for refund of unutilised credit under the provisions of Notification No. 27/2012-CE(NT) dated 18.06.2012 issued under Rule 5 of Cenvat Credit Rules, 2004.
2. The issue involved herein is whether the appellants are eligible for the refund of unutilised credit under Rule 5 ibid read with Notification No. 27/2012-CE(NT) dated 18.06.2012 and whether the Place of Provision of Service herein is to be decided under Rule 3 or Rule 4(a) of Place of Provision of Service Rules, 2012?
3. The facts leading to the filing of the appeals are stated in brief as follows. The appellants i.e. M/s Idex India Pvt. Ltd. are into the business of providing taxable services in the categories of Business Support Service, Internet & Telecommunication Services, Information Technology Software and Legal Consultation Services since October, 2013. They are providing Business Support Services to its overseas holding company, M/s. Idex Corporation, USA and its subsidiaries such as Idex, Japan etc. The main activity of the holding company is to manufacture and sell precision engineered products through its various business units worldwide falling under Fluid & Metering Technology, Health & Science Technology and Fire, Safety and diversified product categories. The appellants aid the selling activities of various business units of Idex Corporation by rendering the services viz. Marketing and Promotion Services, Engineering Support Services to the distributors/customers and Accounting & Management Reporting Services. During the period in issue i.e. April, 2015 to June, 2016, the appellants filed five refund claims under Notification No. 27/2012-CE(NT) dated 18.06.2012 (supra) read with Rule 5 ibid for unutilised accumulated Cenvat Credit, the details of which are as under:-
