2018 (10) TMI 1373 – CESTAT MUMBAI – TMI – Cash refund – export of services or not – Rule 5 of CENVAT Credit Rules, 2004 – rejection on the ground that the services since performed in India, therefore, do not fall under the scope of ‘export of service’ – Held that:- In their own case Fertin Pharma Research & Development Pvt. Ltd. [2017 (7) TMI 1238 – CESTAT MUMBAI], 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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There are no 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 [2014 (5) TMI 105 – BOMBAY HIGH COURT] 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 Pr
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ra These appeals are filed against Order-in-Appeal No. MKK/327-332/RGD/APP/2017 dated 14.12.2017 passed by the Commissioner of Central Excise & Service Tax (Appeals), Raigad. 2. Briefly stated facts of the case are that the appellants have been registered for providing taxable output service under the category of Technical Testing and Analysis Service/Scientific and Technical Consultancy Service . The appellant had claimed to have exported the said services to one M/s Fertin Pharma, Denmark. The inputs/raw materials on which research and development activity was undertaken by the appellant had been purchased from their parent company against valid consideration and imported into India on payment of appropriate customs duty. Appellant undertook research activity on the said goods and exported the services viz. Technical Testing and Analysis Service/Scientific and Technical Consultancy Service , against convertible foreign exchange. They had availed CENVAT Credit on various input ser
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to two services, there has been nexus between the other input services and output services and accordingly the said services satisfied the definition as prescribed under Rule 2(l) of the CENVAT Credit Rules, 2004. Hence, the present appeals. 3. The learned Advocate Shri D.H. Nadkarni for the appellant submits that they had provided services outside India in relation to technical testing and analysis service. It is his contention that as per clause (d) of Rule 6A of Service Tax Rules, 1994, the place of the provision of service is outside India . It is his contention that under the Place of Provisions of Service Rules, 2012, from Rule 4 onwards the respective rules are divided subject-wise i.e. performance based service, immovable property, events etc., and as such the service provided by the appellant would not fall in any of these categories. It is his contention that the services rendered by the appellant squarely covered under the scope of Rule 3 of the Place of Provision of Service
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012 will not be applicable. Further, he has submitted that period from April, 2013 to June, 2013, in similar facts in their own case, this Tribunal decided the issue in their favour reported as Fertin Pharma Research & Development Pvt. Ltd. – 2017 (6) GST 475 (T). Also, this Tribunal in the case of Commissioner of Central Excise, Pune-I Vs. Sai Life Sciences Ltd. – 2016 (42) STR 882 (Tri- Mum)&Principal Commissioner of Central Excise, Pune-I Vs. Advinus Therapeutics Ltd. – 2017 (51) STR 296 (Tri-Mum) held that undertaking test in India and providing results to the overseas customers would fall within the scope of export service and eligible to cash refund of accumulated CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004. On the denial of credit on input services namely, Building Maintenance Service and Rent-a-cab service, the learned Advocate has submitted that there is nexus between the said services with the output service, hence, eligible to credit. 5. Learned AR fo
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se, also cannot be considered to be a good law. The learned AR for the Revenue referred to the judgments of this Tribunal in support of their case namely, Crompton Greaves Ltd. – 2015-TIOL-2724-CESTAT-MUM, and Roha Dyechme Ltd. Vs. CCE, Raigad – 2017-TIOL-3448- CESTAT-MUM and submitted that The present facts are identical mirror image of the facts of the aforesaid judgments and hence, the services are since performed in India, therefore, Rule 6A of Service Tax rules, 1994 is not satisfied, consequently, the appellant are not eligible to cash refund of the accumulated cenvat credit. 6. Heard both sides and perused the records. Undisputedly, the appellant had purchased the goods from the overseas company, on which they discharged appropriate customs duty on its import into India. Necessary tests are carried out by them on the said goods in India and after analysis the relevant report was submitted to the overseas Denmark company. In the process of providing the said output service, that
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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 scrutinized to ascertain if there was, indeed, legislative intent to deny acknowledgement as exporter to a certain category of service providers that were so privileged tell them. There is no dispute that the recipient of service is located outside India and that the consideration is received in foreign convertible currency. Yet, Revenue insists that performance of service is in India. A service is not necessarily a single, discrete, identifiable activity; on the contrary, it is a series of invisibles that cater to the needs of a recipient; it is upon the consumption of the service by the recipient that service is deemed to have become taxable. This has been so held by the Hon ble Supreme
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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, even with the special and specific provision of Rule 4 of Place of Provision of Services Rules, 2012, the performance of service being rendered outside India would render it to be an export. 14. In this context, the legislative intent of incorporating a special and specific provision in Rule 4 may yield further insights. The special provision, which may be seen as an exception to the general Rule 3, deals with services in respect of goods as well as those provided to individuals. Not unnaturally, the services that require the physical presence of the person is taxed where the consumer receives the service and not at his location which as per Rule 2(i)(iv) would be his usual place of re
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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 remedy out some specific situations that would, otherwise, have enabled escapement from tax or leviability to tax where Rule 3 of Place of Provision of Services Rules, 2012 may not serve to confer jurisdiction becomes increasingly obvious. 15.Accordingly, we can infer that the location of performance of service in respect of goods is not an abstract, absolute expression for fastening tax liability on services that involve goods in some way; for that, Rule 3 would have sufficed. A contingency that is not amenable to Rule 3 has been foreseen and remedied by Rule 4 and in the process, the sovereign jurisdiction to tax is asseted. It is, therefore, not by the specific word or phrase in Rule
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(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 trade and such certification, if undertaken in India, will not be able to escape tax by reference to location of the entity which entrusted the activity to the service provider in India. This is merely one situation but it should suffice for us to enunciate that Rule 4(1) is intended to resorted when services are rendered on goods without altering its form that in which it was made available to the service provider. This is the harmonious construct that can be placed on the applicability of Rule 4 in the context of tax on services and the general principle that taxes are not exported with services or goods. 17. The goods supplied to the respondent, minor though the proportion may be, are
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ce 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 consumption-based levy, accordingly, the technical and consultancy service, commences from the stage of undertaking the test on the goods procured and the service is completed on delivery of the test report/certificate to the overseas client. I do not find any reason to deviate from the aforesaid observation of this Tribunal. Further, the judgements referred by the learned A.R for the revenue, in my opinion, are not relevant to the facts of the present case, inasmuch as in the said judgement the issue raised was levy of service tax on procurement of FDA certificate for the goods to be sold in the respective country. In the result, following the aforesaid precedent, I do not find merit in th
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