Commissioner Of Central Excise vs Emerson Innovation Center

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI

COURT No. II

APPEAL No.ST/85011/14

(Arising out of Order-in-Appeal No.PUN-EXCUS-001-APP-113-13-14 dated 10/10/2013 passed by Commissioner of Central Excise & Service Tax (Appeals), Pune-1ai)

For approval and signature:

Honble Mr. P.R. Chandrasekharan, Member (Technical)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities?

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Commissioner of Central Excise, Pune Appellant

Vs. Emerson Innovation Center Respondent Appearance: Shri.A.B.Kulgod, Asst. Comm. (AR)for appellant Shri.Shailesh Bapat, CA, for respondent

CORAM: Honble Mr. P.R. Chandrasekharan, Member (Technical)

Date of Hearing : 18/03/2015 Date of Decision : 18/03/2015

ORDER NO

The appeal is directed against Order-in-Appeal No.PUN-EXCUS-001-APP-113-13-14 dated 10/10/2013 passed by Commissioner of Central Excise & Service Tax (Appeals), Pune-1.

2. Vide the impugned order, the lower appellate authority has allowed refund of Rs.23,87,705/- to the respondent, M/s.Emerson Innovation Center, Pune, under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No.5/2006-CE(NT) dated 14/03/2006. The revenue is in appeal against the said decision only on the ground that for the refund under the said notification nexus has to be established between the exported output service and the input services utilised and in the absence of such a nexus, the refund would not be admissible.

3. The learned Assistant Commissioner (AR) appearing for the revenue reiterates the grounds urged in the appeal memorandum.

4. The learned CA appearing for the respondent submits that in the present case they availed input service credit in October 2011 in respect of the services they imported during May 2008 to September 2011. In respect of exports made during the quarter October 2011 to December 2011, the appellant sought refund of the accumulated Cenvat credit lying in their account. Nowhere in the said Rule 5 or in Notification No.5/2006-CE (NT), is there any condition for establishing a nexus between the input service on which credit has been taken and the output service which has been exported. So long as the credit is admissible, the appellant is not able to utilise the credit, refund can be claimed under Rule 5 of the Rules. The learned CA would rely on the decisions of this Tribunal in the case of Capiq Engineering Pvt. Ltd., Vs. CCE, Vadodara  2011 (22) STR 366 (Tri-Ahmed) and Amdocs Business Services Pvt. Ltd., Vs. CCE, Pune  2013-TIOL-324-CESTAT-MUM in support of his contention. He also relies on the CBEC Circular No.120/01/20101-ST dated 19/01/2010 wherein it has been clarified that the entire purpose of Notification No.05/2006 is to refund the accumulated input/input service credit to exporters and zero-rate the exports. It has also been clarified that there is no requirement of establishing any nexus or the input services should be directly used in the output service exported and so long as the input service has been utilised and export have taken place the notification should be read in a liberal and harmonious manner so as to achieve the object and purpose of the notification. Therefore, he submits that in terms of the Boards Circular there is no requirement of establishing one to one co-relation between the input service credit taken and the out service exported. Accordingly, he pleads for upholding the impugned order and rejecting the revenues appeal.

5. I have carefully considered the submissions made by both the sides.

5.1 Nowhere in Rule 5 of the CCR, 2004, is there any condition of establishing a nexus between the input service credit taken and the output service exported. Notification No.5/2006-ST also does not stipulate any such condition. So long as the credit is admissible and has been taken and lying accumulated and the exporter is unable to utilise the credit, he is eligible for refund of the accumulated credit. This is the whole purpose and aim of Rule 5 of the CCR Rule, 2004. The boards clarification also makes this point very clear. The decisions of this Tribunal in the case of Capiq Engineering Pvt. Ltd. and Amdocs Business Services Pvt.Ltd. also support this view.

6. In the above factual and legal matrix, the impugned order passed by the lower appellate authority cannot be faulted at all. Accordingly, I do not find any merit in the appeal filed by the Revenue and the same is rejected as devoid of merits.

(Dictated in Court)

(P.R. Chandrasekharan) Member (Technical)

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