Case Law Details
Virtusa Consulting Services Pvt. Ltd. Vs Commissioner of CGST Chennai Outer Commissionerate (CESTAT Chennai)
The appeals concern the rejection of refund claims filed by the appellant, a Special Economic Zone (SEZ) unit engaged in rendering software services. The appellant had paid service tax on certain specified services used for authorized operations and subsequently sought refunds under Notification No. 12/2013 dated 1 July 2013. As per the notification, SEZ units are entitled to receive services without payment of service tax for authorized operations. Alternatively, they may pay service tax and either claim a refund or avail Cenvat credit, provided there is no dual benefit.
The appellant stated that it had availed Cenvat credit only for some specified services and claimed refunds for the remaining services used in authorized operations. To support its claim that no dual benefit was taken, the appellant submitted a Chartered Accountant certificate asserting that refunds were claimed only for services where Cenvat credit had not been availed.
The department, however, contended that the appellant had not produced sufficient evidence to establish that it had not availed both Cenvat credit and refund on the same services. Accordingly, it was argued that the matter required verification and should be remanded to the adjudicating authority.
Upon hearing both sides and examining the records, the Tribunal observed that the appellant was indeed eligible for service tax exemption on specified services used in authorized operations as an SEZ unit. It also acknowledged that the appellant had availed Cenvat credit for certain services and sought refunds for others. However, the Tribunal found that the Chartered Accountant certificate submitted by the appellant did not clearly establish that the refund claims were restricted only to those services for which no Cenvat credit had been availed.
The Tribunal noted that while the appellant asserted compliance with the requirement of not availing dual benefits, the documentary evidence provided did not adequately substantiate this claim. As a result, the Tribunal concluded that the issue required further verification.
Accordingly, the impugned orders rejecting the refund claims were set aside, and the matter was remanded to the adjudicating authority. The authority was directed to verify whether the appellant had indeed refrained from availing dual benefits—i.e., claiming both Cenvat credit and refund for the same specified services. The Tribunal clarified that the appellant would be eligible for the refund only if it is established that no Cenvat credit was availed on the services for which the refund was claimed.
The appeals were thus disposed of by way of remand for verification of the appellant’s claim.
anted only if it is proven that no Cenvat credit was availed on the same services. The matter was remanded for detailed examination.
FULL TEXT OF THE CESTAT CHENNAI ORDER
M/s. Virtusa Consulting Services Pvt. Ltd. (herein after referred as the appellant) has filed these appeals against rejection of the refund claim filed in respect of the service tax paid by them on the specified services used in the authorised operations. Both the appeals are having the common issue and hence they are all taken up together for decision by a common order.
2. The appellant submits that they are an SEZ unit rendering software services. As per notification 12/2013 dated 1-7-2013, they are eligible to receive services without payment of service tax for the authorised operations. However, the notification allows them to pay the service tax and claim the service tax paid as refund. In case they pay the service tax, the notification also allows them the option of availing the service tax paid as cenvat credit. The appellant submits that they have availed cenvat credit of the service tax paid in respect of some specified services used in authorized operations. In respect of the remaining ‘specified services’ used in authorized operations, they have claimed refund of the service tax paid. The appellant submits that the notification 12/2013 dated 1-72013 allows both the options. In this regard, the appellant submits that they have produced a Chartered Accountant Certificate to the effect that they have claimed refund only in respect of the services for which they have not availed cenvat credit. Accordingly, he submits that the rejection of the refunds claimed is legally not sustainable and prayed for allowing the refund as claimed by them.
3. The Ld. AR has submitted that the appellant has not submitted any evidence to substantiate their claim that they have not availed the dual benefit of availing cenvat credit and claiming refund on the same specified services for which they have paid service tax. Accordingly, she submits that the matter may be remanded back to the adjudicating authority for verification of the correctness of the claim made by the appellant regarding not availing the dual benefit.
4. Heard both sides and perused the appeal records.
5. I find that the appellant is a SEZ unit eligible for exemption of service tax in respect of the specified services approved by the Development Commissioner, which were used in connection with the authorized operations. In the present case, the appellant have paid service tax in respect of some of the specified services used in the authorized operations and claimed refund of the same. It is their submission that they have not availed Cenvat credit of the service tax paid on these specified services. In support of this claim, the appellant has submitted a Chartered Accountant Certificate.
5.1. In this regard, I find that the appellant has availed cenvat credit in respect of the service tax paid on some specified services used in authorized operations and they have filed the refund claim in respect of the service tax paid on the remaining services. I have verified the Chartered Accountant Certificate produced by the appellant. From the certificate, it is not clear whether the appellant has claimed the refund only in respect of the service tax paid on those specified services which were used in the authorized operations, for which they have not availed cenvat credit. Even though the counsel appearing before the appellant claimed that they have claimed refund only in respect of those specified services used in the authorized operations on which they have not availed cenvat credit, the documentary evidence submitted by the appellant does not support the claim made by the appellant. Thus, I observe that this claim of the appellant needs to be verified. Hence, I am of the view that the issue needs to be remanded back to the Adjudicating Authority for the purpose of verification of the claim made by the appellant that they have not availed the dual benefit. Accordingly, I set aside the impugned order and remanded the matters back to the Adjudicating Authority for the purpose of verification of the claim made with the appellant that they have not availed the dual benefit of availing cenvat credit and claiming refund in respect of the same specified services. The appellant would be eligible for the refund, if it is established that they have not availed any cenvat credit in respect of those specified services which were used in the authorized operations for which they have claimed the refund.
6. The appeals are disposed of by way of remand.
(Dictated and pronounced in open court)
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