2019 (2) TMI 19 – CESTAT MUMBAI – TMI – Refund of CENVAT Credit – input services – Air Travel Agent Services – Banking & Financial Services – Business Auxiliary Services – General Insurance Services – denial on account of nexus – Denial of excess refund claim to the Appellant for the quarters October, 2014 to December, 2014 and January, 2015 to March, 2015.
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General Insurance Services – Held that:- The insurance policy is taken by the Appellant in relation to the financial risks during the course of business that may arise upon the appointment of the employees as Nominee Director/Alternate Director in the investee company and not for the personal consumption of the employees. The said input service is used in the course of provision of output service and has not only a nexus with the output services but is essential for the business of the Appellant, therefore the Appellant is eligible for CENVAT credit on “General Insurance Services” – refund allowed.
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Air Travel Agent Serv
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ed.
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Denial of excess refund claim to the Appellant for the quarters October, 2014 to December, 2014 and January, 2015 to March, 2015 – denial on account of non-reversal of erroneous credit availed by the Appellant in their ST-3 return – mis-match between the opening and closing balance for the month of September, 2014 & October, 2014 – Held that:- Both the Authorities below have erred in considering the amount of unutilised credit for the quarter, which was calculated by deducting the amount of domestic services tax liability for the period discharged through utilisation of CENVAT credit, from the amount of CENVAT credit availed by the Appellant during the period. The submission of the Appellant seems to be reasonable that nowhere in Notification No. 27/2012 or in Rule 5 ibid there is a requirement to consider the amount of unutilised credit for the period. The calculations/tables have been produced by the Appellant for comparing the amount of CENVAT credit balance available on t
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Mumbai by which the learned Commissioner partly allowed the appeal filed by the Appellant and rejected the claim of CENVAT credit qua Air Travel Agent Services , Banking & Financial Services , "Business Auxiliary Services" and General Insurance Services on the ground that there is no nexus between the input services and output services and therefore the Appellant has wrongly availed the CENVAT credit on these services. The learned Commissioner has also rejected the appeal qua the excess refund claim on account of non-reversal of erroneous credit admittedly availed by the Appellant in their ST-3 returns. 2. I have heard learned Counsel for the Appellant and learned Authorised Representative for the Revenue and perused the records. 3. Learned Counsel for the Appellant submitted that the learned Commissioner has erred in rejecting the refund claim filed by the Appellant under Rule 5 of CENVAT Credit Rules, 2004 read with Notification No. 27/2012-CE (NT) dated 18.06.2012. He
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vices Business Auxiliary Services A B C D E F G H I J 1 23.12.15 (Pg. 27) Oct 14 to Mar 15 – 63,559 12,666 3,872 1,172 8,41,890 9,23,159 2 19.07.16 (Pg. 45) Apr 15 to Sep 15 7,70,288 77,662 8,806 1,439 831 – 8,59,026 Total 7,70,288 1,41,221 21,472 5,311 2,003 8,41,890 17,82,185 The facts of the matter in brief are that the Appellant is engaged in providing financial advisory services to overseas clients which includes assistance in monitoring and providing updates about the performances made by the overseas clients. For providing assistance in monitoring and providing updates the Appellants are required to appoint persons as a Nominated Director/Alternate Director in the investee company where investment had been made by overseas client, in order to facilitate the process of portfolio monitoring. The said Nominated Director/Alternate Director do not have any decisions making authority and the overseas client of the Appellant provides guidance on the agenda to the said Director prior to
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f providing services to its overseas clients. Therefore, it is clear that the insurance policy is taken by the Appellant in relation to the financial risks during the course of business that may arise upon the appointment of the employees as Nominee Director/Alternate Director in the investee company and not for the personal consumption of the employees. The said input service is used in the course of provision of output service and has not only a nexus with the output services but is essential for the business of the Appellant, therefore the Appellant is eligible for CENVAT credit on General Insurance Services . In the matter of Morgan Stanley Advantage Services Private Limited which is Appellant s group entity, the Adjudicating Authority in respect of refund claim for the period from April, 2016 to June, 2016 had admitted that the General Insurance Services procured by the claimant had direct nexus with output services and hence eligible for refund. 6. So far as Air Travel Agent Serv
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ing foreign exchange conversion services for its employees travelling abroad for the business of the Appellant and the "Business Auxiliary Services" have been procured by the Appellant for repairing of the cellular phone of its employees who have been provided with the cellular phone/mobile phone for checking emails and for giving replies to the queries of the overseas clients. Whenever the said employees leave the organisation, they have to surrender the said phones to the Appellant and thereafter the same are sent for formatting to avoid leakage of above information. Therefore in my view, these services are essential and there is nexus between the input services and output services and therefore for these services also the Appellant is entitled for refund. In a similar matter, a Co-ordinate Bench of the Tribunal in the matter of Manhattan Associates (I) Development Centre Pvt. Ltd. Vs. CST, Bangalore reported in 2017 (5) GSTL 99 (Tri.-Bang.) has held that the Appellant ther
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nth of October, 2014 and the CENVAT credit availmnet for the said month of October, 2014 was done in the following manner:- Particulars Amount CENVAT credit availed during the month of October 2014 A 11,29,175 Less: Erroneous availment of CENVAT credit in the month of August 2014 B (7,70,687) CENVAT credit availed (as reflected in service tax return) C = A-B 3,58,488 Although the Appellant could have reduced the aforesaid amount which was erroneously taken from the opening balance for the month October 2014, but according to them, then there would have been a mis-match between the opening and closing balance for the month of September, 2014 & October, 2014 respectively. In order to avoid the mismatch the Appellant had adjusted the excess CENVAT credit for the month of October, 2014. This resulted in a difference in the total availment of CENVAT credit for the period October, 2014 to December, 2014 as per the CENVAT credit register and Service Tax return. The Appellant could have al
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ing of the refund claim, whichever is less. 9. Both the Authorities below have erred in considering the amount of unutilised credit for the quarter, which was calculated by deducting the amount of domestic services tax liability for the period discharged through utilisation of CENVAT credit, from the amount of CENVAT credit availed by the Appellant during the period. The submission of the Appellant seems to be reasonable that nowhere in Notification No. 27/2012 or in Rule 5 ibid there is a requirement to consider the amount of unutilised credit for the period. The calculations/tables have been produced by the Appellant for comparing the amount of CENVAT credit balance available on the last day of the quarters, on the day of filling the refund claim and also the quantum of refund claim worked out as per Notification No. 27/2012- CE (NT) dated 18.06.2012. From a perusal of the same, I am of the view that the Appellant has claimed the amount which is lowest among those three heads. 10. A
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imitations, namely:- (a)…………… (b)…………….. (c)…………….. (d)…………….. (e)…………….. (f)……………….. (g) the amount of refund claimed shall not be more than the amount lying in balance at the end or quarter for which refund claim is being made or at the time of filing of the refund claim, whichever is less. (h)………………… (i)……………….. From the plain reading of the above clause (g) it is crystal clear that amount of refund claimed by the respondent shall not be more than the amount lying in balance at the end of the quarter or at the time of filing of the refund whichever is less. As per the fact narrated by the Ld. Counsel the refund claim amount is lesser, both the amount and cenvat credit balance at the end of the quarter as well as cenvat credit balance at the time of filing the refund and therefore the condition envisaged under clause (g) of para 2 of the notification is scrupulously complied with. It is also obser
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, during the relevant period; (C) "Export turnover of goods" means the value of final products and intermediate products cleared during the relevant period and exported without payment of Central Excise duty under bond or letter of undertaking; (D) "Export turnover of services" means the value of the export service calculated in the following manner, namely:- Export turnover of services = payments received during the relevant period for export services + export services whose provision has been completed for which payment had been received in advance in any period prior to the relevant period – advances received for export services for which the provision of service has not been completed during the relevant period; (E) "Total turnover" means sum total of the value of – (a) all excisable goods cleared during the relevant period including exempted goods, dutiable goods and excisable goods exported; (b) export turnover of services determined in terms of clau
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