Capita India Pvt. Ltd. Versus Commissioner of CGST, Mumbai West
Service Tax
2018 (6) TMI 667 – CESTAT MUMBAI – TMI
CESTAT MUMBAI – AT
Dated:- 7-6-2018
Appeal Nos. ST\/85468, 85531, 85746, 85747, 85749\/2018 – Order No. A\/86708-86712\/2018
Service Tax
Mr. Ramesh Nair, Member ( Judicial )
\nShri Prasad Paranjape, Advocate, for appellant
\nShri Dilip Shinde, Assistant Commissioner (AR), for respondent
\nORDER
\nThese appeals are directed against Orders in appeal passed by the Commissioner(Appeals) whereby Ld. Commissioner(Appeals) upheld the rejection of refund claim amounting to Rs. 43,45,951\/- for the period from April, 2013 to September, 2015. The said refund claim was filed by the appellant under Rule 5 read with Notification No. 27\/12- CE(N.T.) dated 18-06-2012, the grounds for rejection of refund claim are as under:
\nSr No
\nParticulars\/reasons for disallowance
\nAmount(Rs.)
\n1
\nService do not qualify as “input service”- absence of these services will have no adve<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n en held that the apartment\/ premises in respect of which consulting services have been aid to Urban Link Consulting Pvt Ltd is not incorporated ST\/85468,85531,85746,85747,85749\/2 3 018 in the ST 2 certificate of the appellant. Accordingly, the appellant is not entitled to refund of credit on the same(Rs. 1,100). = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ale of diesel, he submits that vendor is providing power back up service to the appellant by means of diesel Generator set in the premises of the appellant. These services are for uninterrupted power supply. The charges of the same was cost of such operating expenses including the cost of diesel reimbursed by the appellant therefore even though the cost of diesel is reimbursed services provided is operating diesel set for uninterrupted supply of power, it cannot be said that appellant made payment against sale of the goods. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ts: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n tes the findings of the impugned order. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ed with respect to the installation\/ re-erection of office units of the Appellant and other office equipment used at the business premises from where the output services are provided. These units\/ equipment are used on a day-to-day basis in provision of output services. Accordingly, these services are essential to keep the assets in good condition without which the output services cannot be rendered. Therefore, maintenance and repair, installation and re-erectioning services are essential in provision of output services by the Appellant. The specimen copies of the invoices are attached at page no. 30-31 of the compilation. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n credit is sought to be denied have been incurred during the provision of services provided by the vendor. Further, as per Rule 5(1) of Service Tax (Determination of Value) Rules, 2006, all the expenditure or costs incurred by the service provider in the course of providing taxable service shall be treated as consideration for the taxable service and included in the value for the purpose of charging service tax. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ion to official work. Accordingly, these services are used in relation to the output services provided by the Appellant. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n s. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n an organized and systematic manner which are necessary for smooth running of the business of the Appellant. As prescribed, the Appellant has discharged the service tax on such legal consultancy service as a recipient of service under reverse charge mechanism and hence is entitled to avail t same he credit of the = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n (xviii) Video Tape Production Agency Services- = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n inting of the same. The said posters are displayed in various events for the purpose of business promotion and advertisement of the appellant's business. Promotion of business is an important requirement of the appellant. Accordingly, the said services are essential and used in relation to the out put services provided by the appellant. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n vice tax on such charges. In case of transaction alleged to have made as sale of text article, I find that this payment is towards preparation of various study material used for purpose of training needs of the employee which are required to provide out put service of the appellant. Therefore credit in respect of services or preparation of study material is admissible. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Capita India Pvt. Ltd. Versus Commissioner of CGST, Mumbai WestService Tax2018 (6) TMI 667 – CESTAT MUMBAI – TMICESTAT MUMBAI – ATDated:- 7-6-2018Appeal Nos. ST\/85468, 85531, 85746, 85747, 85749\/2018 – Order No. A\/86708-86712\/2018Service Tax Mr. Ramesh Nair, Member ( Judicial ) Shri Prasad Paranjape, Advocate, for appellant Shri Dilip Shinde, Assistant Commissioner (AR), for respondent ORDER … Continue reading “Capita India Pvt. Ltd. Versus Commissioner of CGST, Mumbai West”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-12214","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/12214","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12214"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/12214\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12214"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12214"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12214"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n (iv) The learned Commissioner (Appeals) has rejected the contention of the appellant that while computation of refund under Rule 5 of the CCR read with Notification No. 27\/2012, refund should be computed by applying the export ratio on 'total cenvat credit availed” for the period instead of “unutilised cenvat credit” remaining at the end of the period(Rs. 33,887)
\n (v) It is inter alia held on scrutiny of the invoices it is clear that customs house agent service is availed for debonding and not procurement of imported goods as claimed by the appellant used in providing output service(Rs. 22,857).
\n2. Being aggrieved by the said order, appellant filed present appeal.
\n3. Shri <\/p>\n
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\n4. As regard the charge of sale of text article, he submits that service have been availed for preparation of various study material used for purpose of training, needs for the employee, appellant has not purchased any goods. In this regard, he placed reliance on the judgment of Hon'ble Delhi High court in case of VPSSR Facilities Vs Commissioner of Value added &Anr reported in [2017 99 VST 1].
\n5. As regard the objection on erection, commission and installation se<\/p>\n
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\n (a) Commissioner of C. Ex. &ST NoidaVs Samsung India Electronics Pvt Ltd [2017(52) S.T.R. 497 (Tri. All)] ST\/85468,85531,85746,85747,85749\/2 6 018 affirmed in Commissioner Vs. Samsung India Electronics Pvt Ltd [2017(52) S.T.R. J 253(All)]
\n (b) Deepak Fertilizer & Petrochemicals Corporation Ltd Vs CCE[2013(32) S.TR. 532(Bom)]
\n (c) M portal India Wireless Solutions P. Ltd Vs. C.S.T. [2012(27)S.T.R. 134(Kar)]
\n7. As regard the dispute on the formula provided under Rule 5 of CCR, 2004 he submits that Ld. Commissioner has failed to correctly apply the formula for computation of refund for the period April, 2013 to September, 2013 inasmuch as he contended that unutilised Cenvat credit remaining at the end of the period should be taken as total Cenvat credit availed. He submits that as per Rule 5 of Cenvat Credit Rules, 2004 “net cenvat credit” defined, according to which total Cenvat credit availed during the period should be taken as net cenvat credit and not unutilised cenvat credi<\/p>\n
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\n9. I find that major amount of refund was rejected on the ground that services do not qualify as input service or same falls under exclusion category. In this regard, I would like to go through nature of service and use thereof which are reproduced below as submitted by appellant;
\n (i) Works Contract Services- Disputed amount Rs. 25,24,004
\n These services are procured in relation to the modernisation, renovation and repairs of the premises\/office equipment of the appellant. Accordingly, these services are used in relation to the output services provided by the Company. The said services are not covered under the exclusion clause of the definition of “input service” as provided under Rule 2(l) of the Credit Rules. The detailed submission in regard is made in subsequent paragraphs
\n (ii) Renting of Immovableproperty service.
\n These services are availed in relation to the renting of the business premises from where the company operates its bu<\/p>\n
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\n (iv) Management maintenance and re * air services – The Appellant requires these services for regular various maintenance of electrical equipment\/ computers\/ servers, Air Conditioners, DG Sets and other asset s used in the business premises. These services are essential to keep the assets in good condition without which the outputs be rendered. Therefore, maintena<\/p>\n
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\n Given the same, it is pertinent to note that the said expenses are part of the provision of the main service provide by the vendor and tax is charged on the same as per the above rule. Accordingly, these services are used only in relation to the output services provided by the Appellant and hence the credit cannot be denied on the same.
\n (vi) Outdoor catering services –
\n These services have been availed by the Appellant in relation to catering facility provided to its employees. Further, it is pertinent to note that the Appellant being a business process outsourcing unit,<\/p>\n
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\n (viii) Sponsorship Services –
\n The said service is availed by the Appellant towards participation of specific employees in certain business conventions\/ conferences to represent the Appellant. As per the prescribed procedure, the Appellant has discharged the service tax on the same under reverse charge basis and availed credit of the same. Accordingly, the said services are towards the business of the Appellant and the credit cannot be denied on the same. architect Services – These services have been availed in relation to sketching, specification and drawing plans of different modernisation and renovation works done at the business premises of the Appellant. Accordingly, these services are required for provision of output services provided by the company. The specimen invoice copies are attached at page no. 50 of the compilation.
\n (x) Business Support Service<\/p>\n
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\n (xi)Public relations management services
\n The said services have been availed by the Appellant in relation to various strategic counselling for the industry, media and perception research etc. The Appellant requires the said services for the purpose of analysing the market position and financial public relation. Accordingly, the said services are essential requirement of the Appellant to maintain its market value and used for the provision of services rendered.
\n (xii) Customs House Agent Services – disputed amount Rs. 22,857
\n The said services have been availed in relation to procurement of imported equipment which are used for provision of output services exported. The said equipment are primarily the I. T. equipment which is used in the provision of the output services by the Appellant. Accordingly, custom house agent's services are essential for procurement of I.T. equipment used in providing output services.
\n (xiii) Commercial training and coaching services – disp<\/p>\n
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\n (xvi) Banking and Other Financial Services- disputed amount Rs. 8 738
\n The Appellant has availed these services in relation to purchase of foreign currency to be used by its employees during their official overseas visits for providing the output services. Accordingly, these services are used in relation to the provision of output services of the Appellant and hence have a direct nexus to the services exported by the Appellant. The specimen invoice copies are attached at page no. 37 to 46 of the compilation.
\n (xvii) Business Auxiliary Services- disputed amount Rs. 8,737
\n These service are availed in relation to renting charges for DG Sets in the business premises of t<\/p>\n
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\n The said services have been availed by the company in relation to video recording of certain events during the business meetings, seminars etc. of the company. Accordingly, these services are used in relation to the output services provided by the Appellant.
\n (xix) Technical Inspection and Certification Services
\n These services have been procured for inspection and testing of earthing wiring of the business premises. The said services are essential to maintain the proper working condition of various equipments used by the employees. Accordingly, these services are essentially required and used in relation to the output services provided by the Appellant.
\n (xx) Photography services-
\n The said services have been rendered by the vendor during the business events organised by the company in relation to photography services so that the important moments of the events can be captured for further reference and business promotion. Accor<\/p>\n
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\n10. From the nature of the services and use thereof as reproduced above, I find that all the services are essential services used for providing output service therefore refund in respect of cenvat credit on aforesaid services cannot be denied on the ground of nexus.
\n11. As regard the charge of exclusion of the service from the definition of input service under Rule 2(l), I find that except 'works contract service' all other services are falling under inclusion category. As regard the works contract service, it is in the nature of repair, maintenance and renovation of existing building of the service provider therefore same is not excluded from the am<\/p>\n
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\n14. As regard erection, commission and installation, Ld. Commissioner denied the refund on the ground that service cannot be identified form the invoices, I find that appellant had explained to the ld. Commissioner(Appeals) that these services were availed in relation to installation\/re-erection of the office unit of the appellant and other office equipment used at the business premises. Description mentioned in the invoice i.e. labour charges per spot service is related to labour work done for installation \/re-erection of office. In this fact it is clear that service is input service and clearly identifiable hence ther<\/p>\n
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