2019 (1) TMI 1043 – CESTAT MUMBAI – TMI – Refund of unutilized CENVAT Credit – Export of services or not – technical testing and analysis services – Rule 5 of CCR – rejection of refund on the ground that technical testing and analysis services provided by the Appellant cannot be termed as export of service – Held that:- Tribunal in another decision in Appellants’ own case involving identical issue in Fertin Pharma Research & Development Pvt. Ltd. vs Commissioner of CGST, Navi Mumbai [2018 (10) TMI 1373 – CESTAT MUMBAI] decided the issue in favor of the Appellant by holding that this Tribunal has already taken a view that the services rendered by the appellant are in the nature of export service and hence eligible to cash refund of accumulated CENVAT Credit.
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The Appellants are entitled for the refund claim of unutilized Cenvat credit – appeal allowed – decided in favor of appellant. – APPEAL NO: ST/87376/2018 – A/85131/2019 – Dated:- 18-1-2019 – Shri Ajay Sharma, Member (Judicia
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ch and development activity was carried out by the appellant, were purchased from Parent Company for valid consideration after payment of appropriate Customs Duty. In other words, there is no temporary transfer by the Parent Company to the appellant but it is a transaction of sale and purchase, wherein ownership of goods is being transferred from Parent Company to them. The Appellant were carrying out research activity and exporting their service against convertible foreign exchange. In the said activity, whatever Cenvat credit was availed by them during the course of provision of service was getting accumulated on account exports. The appellant has filed a claim seeking refund of accumulated Cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 for ₹ 4,31,384/-, but the same was rejected by both the authorities below on the ground that technical testing and analysis services provided by the Appellant cannot be termed as export of service. 3. The Learned Authorised Representati
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ted in Denmark i.e. outside India; (iii) when the service is not covered by negative list of services provided under Section 66D of the Finance Act, 1994; (iv) when the place of removal of service as per Rule 3 of Place of Provision of Services Rules, 2012 is outside India; (v) Payment of such service has been received in convertible foreign exchange; (vi) provider of service and recipient of service are separate establishments and different legal entities having the legal agreement on the subject matter with each other. 3.1 Consequently, the impugned order is set aside and the appeal is allowed with consequential relief, if any to the appellant. He further submitted that for the subsequent period also i.e. from January, 2014 to December, 2015 this Tribunal in another decision in Appellants own case involving identical issue vide order no. A/87552-87557/2018 dated 28.09.2018, titled as Fertin Pharma Research & Development Pvt. Ltd. vs Commissioner of CGST, Navi Mumbai decided the i
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vices since performed in India, therefore, do not fall under the scope of export of service . I find that in their own case this Tribunal has already taken a view that the services rendered by the appellant are in the nature of export service and hence eligible to cash refund of accumulated CENVAT Credit. Also, in the case of Advinus Therapeutics Ltd. (supra), this Tribunal more or less under similar circumstances discussing all aspects of the issue held that scientific or technical consultancy service provided for the development of drugs to the overseas recipient of service was held to be export service . This Tribunal observed as follows: – 13. In the context of a catena of judgments and decisions that exports are not taxable and, with the most palpable manifestation of export of invisibles being the receipt of convertible foreign exchange from a recipient of service located outside the country, that services are taxable at the destination, the scope of Rule 4 must necessarily be sc
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not a charge on the business but on the consumer and it would, logically, be leviable on services provided within the country. It would appear from the exposition in the judgment that the tax was intended as a levy on activities that would otherwise be performed by the recipient for itself. The new industry of hiving out or outsourcing of what was, conceivably, being done within the enterprise was intended to be subject to the new levy. In the matter of service rendered by respondent, this activity could, but for commercial viability, will be executed by the recipient within its own organization or the territory in which it exists. The satisfaction of the customer occurs upon an outcome which is possessed by the recipient. Hence, even if some of the activities are carried out in India, by no stretch can it be asserted that the fulfilment of the activity is in India. Therefore, the inescapable conclusion is that the location of the actual performance of the service is outside India and
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HC-DEL-ST = 2006 (4) S.T.R. 81 (Del.)], took note of, and answered, one of the submissions thus – 4. The contention of the learned Counsel for the petitioner, based on the interpretation of Section 66A of the Act, is that any service that is obtained by a person who has a fixed place of business in India is liable to tax for services availed by him in a foreign country. By way of an example, learned Counsel for the petitioner has cited that if such a person in India goes abroad, and has a haircut, he would be liable to pay service tax in India on the basis of Section 66A of the Act. 5. We are not at all convinced by this argument of learned Counsel for the petitioner. The rules that have been framed by the Central Government make it absolutely clear that taxable service provided from outside India is liable to service-tax. In the example given by the learned Counsel for the petitioner, there is no question on the service of haircut having been received in India. The intent in Rule 4 to
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rivileges available to merchandise trade. The provision itself excludes goods imported temporarily for repairs but that does not, ipso facto, exempt goods imported temporarily for repairs from taxability which would, by default, be predicated by the intent in Rule 3. Consequently, a recipient in India would be liable to tax on such temporary imports for repairs while service to a recipient located abroad would not be taxable. This is in consonance with the privilege of exemption afforded to export of services. The special and distinct role of Rule 4 becomes clearer. 16. Not intended to tax the activity of altering goods supplied by the recipient of service or for repairs on goods, Rule 4(1) of Place of Provision of Services Rules, 2012 would appear, by elimination of possibilities, to relate to goods that require some activity to be performed without altering its form. The exemplification in the Education Guide referred supra renders it pellucid. Certification is an important facet of
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hich it has been supplied, it cannot be said that services have been provided in respect of goods even if it cannot be denied that services have been rendered on the goods. Consequently, the provisions of Rule 4(1) are not attracted and, in terms of Rule 6A of Service Tax Rules, 1994, the definition of export of services is applicable thus entitling the appellant to eligibility under Rule 5 of Cenvat Credit Rules, 2004. 8. I do not find merit in the contention of the learned AR for the revenue that the ratio laid down by the Hon ble Bombay High Court in M/s SGS India Ltd. s case(supra) cannot be made applicable to the facts of the present case on the ground that in the said case, the Place of Provision of Service Rules,2012 was not considered. This Tribunal while interpreting the provisions of new Rules, that is, Place of Provision of Service Rules, 2012 followed the ratio laid down in the said case in reiterating the basic principle of levy of service tax and observed that it is a con
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ation to credit availed input services denied by the learned Commissioner (Appeals) observing that necessary evidences in relation to Building maintenance charges were not produced to establish the nexus with the output service and secondly the rent-a-cab service since placed under the exclusion clause of the definition of input service after amendment to Rule 2(l) of the Cenvat Credit Rules, 2004 with effect from 01.4.2011. Accordingly, the matters are remanded to the adjudicating authority to calculate the admissibility of refund amount except the credit availed on input services viz. Building maintenance charges and rent-a-cab service. 9. Appeals are disposed of accordingly. 4. Since the issue involved in this Appeal has already been decided by this Tribunal in Appellant s own case, for the earlier periods, therefore relying upon the same, I hold that the Appellants are entitle for the refund claim of unutilized Cenvat credit. As a result, the impugned order is set aside and Appeal
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