The Commissioner of GST & Central Excise Versus BNP Paribas Sundaram Global Securities Operations Pvt Ltd
Service Tax
2018 (1) TMI 1176 – MADRAS HIGH COURT – TMI
MADRAS HIGH COURT – HC
Dated:- 22-12-2017
C.M.A.No.3493 of 2017
Service Tax
S. Manikumar And R. Pongiappan, JJ.
For Appellant : M/s.Aparna Nandakumar
JUDGMENT
( Judgment of this Court was made by S. Manikumar, J. )
Civil Miscellaneous Appeal is filed against the Final Order No.40778 of 2017, dated 22.05.2017, on the file of the Customs Excise and Service Tax Appellate Tribunal, South Zone Bench, Chennai.
2. Short facts leading to the appeal are that, M/s. BNP Paribas Sundaram Global Securities Operations Private Limited, Chennai, (hereinafter called 'Respondent') is an 100 % EOU, engaged in providing Business Auxiliary Service and Business Support Service. The respondent filed refund claim with the Assistant Commissioner of Service Tax, Division III, for Rs. 71,36,924/- for the service tax pa
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t 4th and 5th Floor of Menon Eternity, New Door No.165, St.Mary's Road, Alwarpet, Chennai-18.
1668253
The premises were not registered at the time of export but subsequently obtained Registration.
06.
Services received at International Tech Part Unit No.1 to 4, 11th Floor Taramani Chennai.
1357366
3122455
3. The respondent also filed a refund claim with Assistant Commissioner of Service Tax, Division III, for Rs. 65,02,602/- for the service tax paid, on input service tax credit taken, during the period April 2013 to June 2013 under Rule 5 of the CENVAT Credit Rules, 2004. The adjudicating authority sanctioned refund of Rs. 33,01,688/- and rejected the remaining amount, on the ground of Non-Registration of premises and ineligible CENVAT credit on Car parking charges. The adjudicating authority rejected refund of CENVAT credit, on the following services for the reasons stated in the following table, in the Order-in-Original No
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04.2016, the first appellate authority set aside a portion of the order of the original authority, and allowed refund, as detailed below:
S.No.
Services
Allowed by Commissioner (Appeals)
OIO No.05/2016
OIO NO.12/2016
01.
Car Parking Charges
1557
0
02.
Rental Charges for scrubbing machine
0
1548
03.
Services received at 4th and 5th Floor of Menon Eternity, New Door No.165, St.Mary's Road, Alwarpet, Chennai-18
1668253
1596745
04.
Services received at International Tech Park Unit No.1 to 4, 11th Floor Taramani Chennai.
1357366
1241139
4.2 In so far as SI.No.3 and 4 of the above table are concerned, the Commissioner (Appeals) observed that Registration is not mandatory to take credit and to claim refund, and held that non-registration of premises cannot be a ground to reject refund claim. Accordingly, he set aside the impugned order to the extent of rejection of the portion of the
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d for scrubbing machine, Commissioner (Appeals) observed that scrubbing machine was used for cleaning the office of the respondent and it has nexus with the provision of their output service and thus the said service, is qualified as input service, for taking CENVAT credit, as per the definition of the input service and set aside disallowance of CENVAT credit.
4.5 While the Commissioner (Appeals) decision allowing the credit in respect of Car Parking Charges and Rental charges for scrubbing machine was found acceptable, the decision in respect of credit availed on the inputs received, in the premises which were not registered, prior to export, but subsequently obtained Registration was found to be not legally correct, on the above finding the respondent filed an appeal before CESTAT.
5. CESTAT, Madras, vide FO No.40778 dated 22/05/2017 held inter alia that:
(i) Revenue is aggrieved that the Commissioner (Appeals) has not appreciated the judgment of Hon'ble High Court in the cas
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–
“1. Whether the decision of Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Chennai (CESTAT for Short) in Allowing refund of Cenvat credit even without registration is correct?
2. Whether CESTAT is erred in not considering the safeguards, conditions and limitations as stipulated in the Appendix to the Notification No.27/2012-CE(NT), dated 18.06.2016.”
7. Supporting the prayer, Ms.Aparna Nandakumar, learned counsel for the appellant submitted that registration is an act by which every manufacturer/assessee/service provider, comes under the ambit of Central Excise Act, 1944 / Finance Act, 1994. In order to avail any substantive benefit, like, CENVAT Credit available under the statute, registration of premises from which the taxable service is rendered is a pre-requisite. Therefore, when registration has not been done as per Section 69 of the Act, the respondent is not entitled for refund of CENVAT read with rule 4(1) of the Rules which render them ineligible f
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o submitted that a Larger Bench of CESTAT, New Delhi in the case of Steel Strips vs CCE, Ludhiana – 2011 (269) ELT (Tri-Del) vide para 5.16 held as follows:
“Modvat law has codified procedure far adjustment of duty liability against Modvat Account. That is required to be carried out In accordance with law and unadjusted amount is not expressly permitted to be refunded. In absence of express provision to grant refund, that is difficult to entertain except in the case of export. There cannot be presumption that in the absence of debarment to make refund, in other cases that is permissible. Refund results in outflow from treasury, which needs sanction of law and an order of refund for such purpose is sine qua non. Law has only recognized the event of export of goods for refund of Modvat credit as has been rightly pleaded by Revenue and present reference is neither the case of “otherwise due” of the refund nor the case of exported goods. Similarly absence of express grant in statute does
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r of Service Tax, Chennai -III Vs. M/s Scioinspire Consulting Services (India) P Ltd., applied by CESTAT, Madras, for deciding the appeal in favour of the respondent, was accepted by the department due to monetary limit and not on merits, and therefore, learned counsel for the appellant submitted that the ratio of the said judgment, should not have been taken as a binding precedent, in view of Section 35R (3) of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. The subsequent decision of CESTAT, Madras, vide FO No. 42500/2016 dated 20/12/2016 in the case of the same party viz., M/s Scioinspire Consulting Services (India) P Ltd. was also appealed in this Hon'ble Court, by the department vide CMA. Sr. No.54980 of 2017.
11. Learned counsel for the appellant further submitted that a Hon'ble Division Bench of this Court, in the case of Commissioner of Central Excise, Coimbatore Vs Sutham Nylocots, vide final order in CMA No.926/2006, dated 09.01.2014, repo
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tions as stipulated in the Appendix to Notification No.05/2006-CE(NT) dated 14.03.2006?
3. Whether CESTAT i.e.Respondent No.1 is correct in applying the ratio of the judgment of the Hon'ble Karnataka High Court in the case of M/s.mPortal Wireless Solutions Private Limited when the said judgment was not accepted on merits but due to low revenue effects?”
14. After considering the provisions, relevant notifications and decisions in M/s.mPortal India Wireless Solutions Private Limited V. Commissioner of Service Tax, Bangalore, reported in 2012 (27) S.T.R.134 (Kar.); in Commissioner of Service Tax V. Tavant Technologies India Private Limited, reported in 2016 (3) TMI 535; in Commissioner, Service Tax Commissionerate V. Atrenta India Private Limited, reported in 2017 (2) ADJ 590; and in Commissioner of Central Excise, Coimbatore Vs. Sutham Nylocots, reported in 2014 (306) E.L.T. 255 (Mad), a Hon'ble Division Bench, answered the above said substantial questions of law, raised ther
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