2018 (6) TMI 676 – MADRAS HIGH COURT – TMI – 100% EOU – Refund of CENVAT credit – denial of refund on the ground of Non-Registration of premises Held that:- Reliance placed in the case of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX [2011 (9) TMI 450 – KARNATAKA HIGH COURT], where it was held that Registration not compulsory for refund – refund allowed – appeal dismissed – decided against Revenue. – C.M.A. No. 1052 of 2018 Dated:- 4-6-2018 – S. Manikumar And V. Bhavani Subbaroyan, JJ. For the Appellant : Mrs. Aparna Nandakumar JUDGMENT ( Judgment of this Court was delivered by S. Manikumar, J. ) Civil Miscellaneous Appeal is directed against the order of the Customs Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai (CESTAT) dated 31.07.2017 in Final Order No.41584 of 2017. 2. It is the case of the appellant that M/s.BNP Paribas Sundaram Global Securities Operations Private Limited, Chennai, respondent is an 100% EOU, engaged in pro
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44 04 Unregistered premises at Mumbai 86947 The premises were not registered 05 Unregistered premises at Principal Tower, College Road, Chennai 11293 06 Services received at 4th and 5th Floor of Menon Eternity, New Door No.165, St.Mary's Road, Alwarpet, Chennai-18 1486920 The premises were not registered at the time of export but subsequently obtained Registration. 07 Services received at International Tech Park Unit No.1 to 4, 11th Floor, Taramani Chennai. 1144872 3. Aggrieved by the above orders, the respondent filed an appeal before Commissioner (Appeals). The first appellate authority, Commissioner (Appeals) vide combined Order-in-Appeal No.24/2016 dated 18.02.2016 set aside a portion of the order of the original authority, and allowed refund as detailed above: S. No. Services Sanctioned by Commissioner (Appeals) Sl.No. As in table at para 2 above. 01 Car Parking charges 111240 2 02 Services received at 4th and 5th Floor of Menon Eternity, New Door No.165, St.Mary;s Road, Alwar
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n respect of Car parking charges, Commissioner (Appeals) observed that the parking area cannot be considered as a separate area and it is a part of the premises occupied by the respondent. He also held that the service tax paid on the rental charges is eligible for CENVAT credit, then service tax paid on the car parking charges is equally eligible for CENVAT credit and set aside the disallowance of CENVAT credit and upheld the disallowance of CENVAT credit in respect of Event Management service. 6. While the decision of the Commissioner (Appeals) allowing the credit in respect of Car Parking Charges was found acceptable, the decision in respect of credit availed on the inputs received in the premises which was not registered prior to export, but subsequently obtained Registration was found to be not legally correct and hence the Department filed an appeal before CESTAT. 7. Contentions of the appellant herein were not accepted by CESTAT, Madras and vide FO No.40778 dated 22/05/2017 dism
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follows: 7.2. From the grounds of appeal and statement of facts at page 17 of the appeal folder, it is seen that Revenue is aggrieved that the Commissioner (Appeals) has not appreciated the judgment of the Hon'ble Madras High Court in the case of Commissioner of Central Excise, Coimbatore Vs. Sutham Nylocots as reported in 2014(306) ELT 255 (Mad.). No doubt, the Hon'ble High Court in the said judgment had ruled that credit accrued can take effect only after the date of registration, however, the Hon'ble High Court in the subsequent judgment passed on 10.4.2017 in the case of Scioinspire Consulting Services, referred to supra, have distinguished the facts contained in Sutham Nylocots observing that the said case was dealing with the provisions of Section 11AB of the Central Excise Act, 1944 and that the only ground rejection of the refund therefor was that the additional building was not registered with the concerned authority. The Hon'ble High Court agreeing with the v
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es, that has been pointed out in the present case, we follow the ratio already laid down in the above said final order of the tribunal and dismiss the appeal of the department." 8. Aggrieved over the same, instant Civil Miscellaneous Appeal is filed on the following substantial questions of law. 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, i.e. 1st respondent 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 . 9. Supporting the prayer sought for, Ms.Aparna Nandakumar, learned counsel for the revenue submitted that: (i) 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 be
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ification No.5/2006-CE(NT) dated 14.03.2006 {Condition No.3(b)} where in it is stated that refund of CENVAT credit shall be allowed only in respect of the registered premises of the service provider from where the output services are exported. (iv) It has been held that registration was not a pre-requisite to claim refund under Rule 5 of CENVAT Credit Rules, 2004. However, the Larger Bench of CESTAT, New Delhi in the case of Steel Strips Vs. CCE, Ludhiana 2011 (269) ELT (Tri-Del) vide para 5.16 has categorically stated that Modvat law has codified procedure for adjustment of duty liablity 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 tre
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ror by stating that the respondent was entitled to credit and refund in view of non-taxability of export service. This is for the reason that Rule 4 of Export of Service Rules, 2005 permitted a service provider to export services without payment of service tax, and thus, there is liability to pay service tax on export of service, but for this rule. Hence, for export of service by a service provider, registration is a sine qua non for procedural and substantive compliance. (vi)The judgment of the Hon'ble High Court of Madras in the case of Commissioner of Service Tax, Chennai-III Vs. M/s.Scionispire Consulting Services (India) P Ltd., applied by CESTAT for deciding the appeal in favour of the respondent was accepted by the department due to monetary limit and not on merits, and therefore, it is humbly 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 F
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ny credit it would accrue only subsequently to the date of the registration with the Department'. Hence, the refund of unutilized input CENVAT credit taken towards rendering the input services availed and used in providing the taxable output services exported, would not arise prior to the date of registration. 10. Heard Ms.Aparna Nandakumar, learned senior counsel for the revenue and perused the materials available on record. 11. Going through the material on record, and adverting to the submissions duly supported by the grounds of challenge, we are of the view that the issue is no longer res integra and is covered by a decision of this Court in Commissioner of Services Tax-III, Chennai Vs. M/s. Scioinspire Consulting Services India Private Limited, Chennai and another, in C.M.A.No.860 of 2017, wherein the following substantial questions of law were framed:- "1. Whether the decision of CESTAT i.e. Respondent No.1 in allowing refund of Cenvat credit even without registration is
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minds, a bare perusal of the said notification would show that it only sets out the procedure for claiming refund of unutilized input service credit. The only clause of the notification, which, perhaps, the Department could have relied upon, is Clause 3, which, to our minds, has no bearing on the issue arising in the instant case. For the sake of convenience, the relevant part of the said notification is extracted hereafter : "Notification No.05/2006-Central Excise (N.T.) 14th March 2006 G.S.R. (E) In exercise of the powers conferred by rule 5 of the CENVAT Credit Rules, 2004 (hereinafter referred to as the said rules), and in supercession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.11/2002 – Central Excise (NT), dated 1st March, 2002, published in the Gazette of India Extraordinary, vide number G.S.R.No.150(E), dated 1st March 2002, the Central Government hereby directs that refund of CENVAT credit shall be allowed in res
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uated, along with a copy of the invoice and a certificate from the bank certifying realization of export proceeds." 7.2. A bare perusal of the clause would show that in so far as the provider of output services is concerned, for making an application for refund of CENVAT Credit, he is required to file an application in the prescribed form, i.e., Form A, which is annexed to the notification, and the said application is required to be made to the Deputy Commissioner of Central Excise, or, the Assistant Commissioner of Central Excise, as the case may be. In so far as the jurisdiction of the concerned Officer is concerned, the same is fixed, in consonance with the location of the registered premises of the service provider, from which, the output service are exported. Furthermore, the application is required to be accompanied with a copy of the relevant invoices and a certificate from the bank, indicating therein, the realization of export proceeds. 7.3. Apart from the aforesaid, ther
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laim relates, i.e., Maximum refund ? total CENVAT credit taken on input services during the given period X export turnover / Total turnover ………" 7.5. Therefore, there is no merit in the submission advanced on behalf of the Revenue that the said notification would disentitle the claim of the Assessee qua refund of CENVAT credit." 13. On Questions of Law 1 and 3, the Hon'ble Division Bench, at paragraph Nos.8.4 to 8.7, considered thus "8.4.What is relevant to note is that Rule 5 of the 2004 Rules does not stipulate registration of premises as a necessary prerequisite for claiming a refund. 8.5.In so far as the Assessee in this case, is concerned, it had obtained registration of its premises way back on 23.01.2009. The record shows that allegation of non-registration of premises relates to another building, which was taken on lease by the Assessee and is located in Alwarpet, Chennai. Concededly, services were exported to a overseas Company, from this building whic
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and was located at Alwarpet, Chennai", was not registered. 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 therein, against the revenue. 15. As facts and grounds of challenge are duly covered by the abovesaid decision, we have no hesitation in dismissing the instant Civil Miscellaneous Appeal, holding the substantial questions of law against the revenue. Civil Miscellaneous Appeal is dismissed. No Costs. –
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