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Case Law Details

Case Name : Warburg Pincus India Pvt. Ltd.Vs Commissioner of CGST (CESTAT Mumbai)
Appeal Number : Service Tax Appeal No. 87241 of 2019
Date of Judgement/Order : 14/11/2022
Related Assessment Year :

Warburg Pincus India Pvt. Ltd.Vs Commissioner of CGST (CESTAT Mumbai)

CESTAT Mumbai held that refund on inputs in respect of Club or Association Services, Services by Air-conditioned Restaurants, Short Term Hotel Accommodation Services, Mandap Keeper Services, Convention Services, Cable Operator Services and for Sponsorship Services as well as Event Management Services were already allowed to the appellant in earlier period. Hence the same is allowed here as well.

Facts-

The appellant company is engaged in the business of providing investment advisory service to its customers M/s. Warburg Pincus LLC, USA. The entire turnover being export of service to USA without payment of Service Tax, unutilized CENVAT Credit on input services was sought to be refunded but the refund Sanctioning Authority, had allowed part refund.

It also rejected same credits as inadmissible against which Appellant preferred appeals before the Commissioner of Central Tax (Appeals), who disposed of the by sanctioning refund to the tune of Rs. 2,22,87,989 and rejecting refund of Rs. 13,55,221/- on the ground that CENVAT Credit availed on Club or Association Services etc were not eligible input services as those have no nexus with the services exported by the Appellant. Legality of the said order to the extent of rejection of refund is the issue in the appeal.

Conclusion-

In the case of Warburg Pincus India Pvt. Ltd. vs. Commissioner of Central Excise, Mumbai, passed in the Appellant’s own case has argued that for earlier period this Tribunal has specifically allowed refund on inputs in respect of Club or Association Services, Services by Air-conditioned Restaurants, Short Term Hotel Accommodation Services, Mandap Keeper Services, Convention Services, Cable Operator Services and for Sponsorship Services as well as Event Management Services, the issue of ailment of CENVAT Credits on these two services were also confirmed by this Tribunal.

Held that input services availed by the Appellant as eligible credits and in view of the fact that Notification No. 27/2012-CE (NT) permits refund of such un utilized credits of the exporters. The Appellant is eligible also to get refund of the un utilised CENVAT Credit to the tune of Rupees thirteen lakhs with applicable interest and the Respondent-Department is directed to pay the same within two months of receipt of this order.

FULL TEXT OF THE CESTAT MUMBAI ORDER

Partial rejection of 3 refund claims for the period between April, 2016 and June, 2017 made by the Appellant under Notification No. 27/2012-CE (NT) read with Rule 5 of the CENVAT Credit Rules, 2004 on the ground that no nexus exists between inputs and export outputs that has been confirmed by the Commissioner (Appeals) in a common order, referred above, is assailed in this appeal.

2. Facts of the case, in brief, is that Appellant company is engaged in the business of providing investment advisory service to its customers M/s. Warburg Pincus LLC, USA. The entire turnover being export of service to USA without payment of Service Tax, un utilised CENVAT Credit on input services was sought to be refunded but the refund Sanctioning Authority, had allowed part refund vide Order-in-Original dated 29.09.2017, 19.03.2018 and 28.03.2018 respectively. It had also rejected same credits as inadmissible against which Appellant preferred appeals before the Commissioner of Central Tax (Appeals-I), Mumbai who disposed of the same vide his common order dated 28.12.2018 by sanctioning refund to the tune of Rs.2,22,87,989/- and rejecting refund of Rs.13,55,221/- on the ground that CENVAT Credit availed on Club or Association Services, Services by Air-conditioned Restaurants, Sponsorship Services, Event Management Services, Short Term Hotel

Accommodation Services, Mandap Keeper Services, Convention Services and Cable Operator Services were not eligible input services as those have no nexus with the services exported by the Appellant. Legality of the said order only to the extent of rejection of refund is assailed in this appeal.

3. During the course of argument learned Counsel for the Appellant, in submitting judgment of this Tribunal reported in 2018 (364) E.L.T. 159 (Tri. – Mumbai) in the case of Warburg Pincus India Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai, 2019 (7) TMI 337 – CES TAT MUMBAI in the case of Warburg Pincus India Pvt. Ltd. Vs. Commissioner of Service Tax-II, Mumbai, Final Order No. A/87265-87268/2019 dated 09.12.2019 in the case of Warburg Pincus India Pvt. Ltd. Vs. Commissioner of Central Excise, Mumbai, passed in the Appellant’s own case has argued that for the earlier period this Tribunal has specifically allowed refund on inputs in respect of Club or Association Services, Services by Airconditioned Restaurants, Short Term Hotel Accommodation Services, Mandap Keeper Services, Convention Services, Cable Operator Services and for Sponsorship Services as well as Event Management Services, the issue of availment of CENVAT Credits on these two services were also confirmed by this Tribunal consistently through a series of judgments, for which having regard to the precedent set by this Tribunal, the order passed by the Commissioner (Appeals) to the extent of denial of CENVAT Credit can be modified in allowing the credits in favour of the Appellant. For Sponsorship Services he placed his reliance on the judgment of this Tribunal passed in the case of M/s. 24/7 Customer Pvt. Ltd. Vs. Commissioner of Central Tax, Bengaluru East reported in 2021 (8) TMI 814 – CESTAT, Bangalore and in the case of M/s. Microsoft Research Lab India Pvt. Ltd. Vs. Commissioner of Central Tax, Bangalore North reported in 2021 (8) TMI 806 – CESTAT Bangalore and for Event Management Services reliance is placed by him in the case of M/s. 24/7 Customer Pvt. Ltd. Vs. Commissioner of Central Tax, Ben galuru East reported in 2021 (8) TMI 814 – CESTAT Bangalore, M/s. Moneygram India Pvt. Ltd. Vs. Assistant Commissioner – Mumbai West reported in 2020 (3) TMI 744 – CESTAT Mumbai and Goldman Sachs Services Pvt. Ltd. Vs. Commissioner of Central Tax, Bangaluru East reported in 2021 (52) G.S.T.L. 425 (Tri. – Bang.). Further, in placing reliance on the final order passed by this Tribunal on dated 13.03.2018 in his own appeal reported in 2018 (364) ELT 159 (Tri. -Mumbai) and in the final order No. A/87265-87268/2019 passed on dated 09.12.2019, learned Counsel for the Appellant further argued that not only in those judgments the credits were held to be eligible credits but there was clear observation made by the Tribunal that it would be totally illegal and arbitrary to disallow refund by the adjudicating authority to held that certain inputs services were not admissible without issuing a show-cause notice and carrying out a process of adjudication concerning inadmissibility of the input services. With reference to the clarification made through tax research unit of CBEC vide letter dated 16.03.2012 wherein new scheme introduced by substituted Rule 5 was being clarified, in stating that kind of correlation between exports and inputs services was not required to be established, he also placed his reliance on the judgment of this Tribunal passed in the case of M/s. MSCI Services Pvt. Ltd. Vs. Commissioner of CGST reported in 2018–VIL-576-CESTAT-MUM-ST that has applied the clarificatory circular made on amended Rule 5 of the CENVAT Credit Rules, 2004 and allowed the benefit of refund to the Appellant that was denied by the Respondent-Department. In toto, he prays for acceptance of his appeal by way of grant of refund against the input credits that was denied by the Commissioner (Appeals).

4. In response to such submissions, learned Authorised Representative for the Respondent-Department has argued in favour of the reasoning and rationality of the order passed by the Commissioner (Appeals) wherein he had allowed credits in respect of 7 categories of inputs out of total 15 categories of CENVAT Credits and each item is individually dealt by him through a speaking order that contains detail of the ground of rejection which had not confined it solely to nexus but also to the impact on the performance of the company in the absence of non-availment of such services, for which he sought no interference of the Tribunal in the order passed by the Commissioner (Appeals).

5. Having regard to the submissions made by both the sides I am of the considered view that the issue concerning rejection of refund against credits on inputs taken by the Appellant engaged solely on export of services is not required to be decided again in evaluating the eligibility of availment of such input credits by the Appellant since judicial precedent set by this Tribunal would rule the field in the absence of any contradictory finding by the Appellate Court. Therefore, in reiterating what has been observed by me in respect of Appellant’s earlier appeal that was decided on 05.07.2019 that judicial precedent is to be carried forward for maintenance of certainty and predictability in the decision making process that has already held the input services availed by the Appellant as eligible credits and in view of the fact that Notification No. 27/2012-CE (NT) permits refund of such unutilised credits of the exporters, the following order is passed.

THE ORDER

6. The appeals are allowed and the order passed by the Commissioner of Central Tax (Appeals-I), Mumbai vide Order-in­Appeal No. IM/CGST A-I/MUM/417-419/18-19 dated 28.12.2018 is hereby modified in holding that the Appellant is eligible also to get refund of the unutilised CENVAT Credit to the tune of Rs.13,55,221/- with applicable interest and the Respondent-Department is directed to pay the same within two months of receipt of this order.

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